The Auditor May Identify Some Risks That Cannot Be Effectively

question 21

Multiple Choice

The auditor may identify some risks that cannot be effectively tested by substantive tests alone,for example,when there are paperless transactions (perhaps using EDI - electronic data interchange) .To address these risks,the auditor is required to

• A)assess the design effectiveness of relevant controls and test them.
• B)obtain an understanding of the controls and test them if reliance is intended.
• C)obtain an understanding of the controls and assess their design effectiveness.
• D)test the controls that address the paperless aspects of the transactions.

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Definitions:

Foreseen

Anticipated or predicted based on existing knowledge or evidence.

Outcome

The result or consequence of an action, process, or decision, which can be observed and measured.

Community Psychologists

Professionals focusing on the study and enhancement of individual well-being within community contexts, emphasizing social issues, community development, and social change.

Social Environments

The immediate physical and social setting in which people live or in which something happens or develops, including the surrounding culture, groups, and institutions influencing an individual's life.