In Which of the Following Situations Will Auditors Typically Rely

question 30

Multiple Choice

In which of the following situations will auditors typically rely on internal controls over financial reporting?

• A) If control risk is assessed at a high level.
• B) If the controls are determined to be designed and operating effectively.
• C) If the clients asks the auditor to test controls.
• D) If the controls are sufficient to increase control risk to an acceptable level.

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Definitions:

Reasonable

A standard in law that denotes fairness, rationality, and sensibility in actions, decisions, or judgments, as perceived by an average person.

Void

A term describing a contract or legal agreement that is invalid or legally unenforceable from its inception.

Restrict Competition

Practices or policies that limit competition in the marketplace, often scrutinized and regulated by antitrust laws.

Breach of Contract

An occurrence when one party fails to fulfill their obligations under a contract.