If the Client Has Well-Designed, Implemented, and Documented Controls Over

question 46

Multiple Choice

If the client has well-designed, implemented, and documented controls over the preparation of accounting estimates, then an appropriate risk response would be _______.

• A)to focus this audit time on another area, and conclude there is no material risk in this area
• B)to test the operating effectiveness of the controls
• C)to test the operating effectiveness of the assertions
• D)to obtain written representation from management to this effect, which negates the need for any testing

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Definitions:

Interest Expense

The expense an entity faces over time for borrowing funds.