The Auditor Has Chosen the Preliminary Strategy of Primarily Substantive

question 2

Multiple Choice

The auditor has chosen the preliminary strategy of primarily substantive testing. Which of the following is not a validly specified component of this strategy?

• A) set control risk at a high level
• B) plan tests of controls, probably testing computer controls embedded in the client's system
• C) plan few, if any, tests of controls
• D) plan extensive substantive tests
• E) plan to obtain a minimum understanding of relevant portions of internal controls.

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Definitions:

Inductive Reasoning

A method of reasoning in which specific observations lead to a general conclusion or theory.

Deductive Reasoning

The use of general principles to predict specific outcomes. Often uses “if… then” statements.

Technology

The application of scientific knowledge for practical purposes, especially in industry.

Chemicals

Substances produced by or used in a chemical process, including both natural and synthetic materials.