Auditors Follow a Four- Step Approach to Reduce Assessed Control

question 56

Multiple Choice

Auditors follow a four- step approach to reduce assessed control risk. Which is NOT one of them?

• A) Identify key controls that should reduce control risk for each transaction- related audit objective.
• B) Apply the transaction- related objectives to the class of transactions being tested.
• C) Develop appropriate tests of controls for all internal controls that are used to reduce the preliminary assessment of control risk below maximum (key controls).
• D) Perform analytical procedures on the transaction cycle tested.

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Definitions:

Content Effects

The impact that the subject matter has on the processing and outcome of cognitive tasks.

Formal Reasoning

Reasoning about problems with explicit premises, finite solutions, and well-defined operations.

Americans

Residents or citizens of the United States, often referring to their culture, society, or characteristics.

Situated Cognition

A belief that one’s culture and one’s everyday surroundings and tasks set both boundaries and possibilities for the cognitive tasks that are practiced, and therefore strengthened, during the normal course of daily living.