After Obtaining an Understanding of Internal Controls and Assessing Control

question 56

Multiple Choice

After obtaining an understanding of internal controls and assessing control risk on the audit of a non-public company, an auditor decided to perform tests of controls. The auditor most likely decided that:

• A)it would be efficient to perform tests of controls that would result in a reduction in planned substantive tests.
• B)additional evidence to support a further reduction in control risk is not available.
• C)an increase in the assessed level of control risk is justified for certain financial statement assertions.
• D)there were many internal control weaknesses that could allow errors to enter the accounting system.

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Definitions:

Heart Muscle

Also known as myocardium, this is the muscular tissue of the heart responsible for its pumping action.

Inflammation

The body's response to injury, irritation, or infection, characterized by redness, warmth, swelling, and pain in the affected area.

Myocardial Infarction

A medical condition commonly known as a heart attack, resulting from the interruption of blood flow to part of the heart, causing heart cells to die.

Oxygen

A chemical element with symbol O, essential for respiration in most living organisms and used in various industrial applications; it is the most abundant element in the Earth's crust.