After the Auditor Has Identified the Key Internal Controls and Weaknesses

question 100

Multiple Choice

After the auditor has identified the key internal controls and weaknesses and assessed control risk,it is appropriate to decide whether

• A)substantive tests will be increased sufficiently to justify the cost of performing tests of controls.
• B)substantive tests will be reduced sufficiently to justify the cost of performing tests of controls.
• C)tests of controls will be increased sufficiently to justify the cost of performing substantive tests.
• D)tests of controls will be reduced sufficiently to justify the cost of performing substantive tests.

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Definitions:

Current Period

The present or most recent accounting timeframe in which transactions and financial events are recorded for reporting.

Allocation Bases

A criterion or set of criteria used to distribute costs or revenues among various departments, products, or projects within an organization, aiming for fairness and accuracy in accounting.

Salaries

Regular payments made to employees for their services, typically expressed on an annual basis.

Grinding Department

A specialized unit within a manufacturing process where materials are ground to the desired size or consistency.