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:

Sales Journal

A specialized accounting journal used to record all sales transactions of a business.

Sales Revenue

The income generated from selling goods or services over a specific period before deducting any costs or expenses.

Accounts Receivable

Payments due to a company from its customers for the provision of goods or services, yet to be paid.

Sales Invoices

Documents issued by a seller to a buyer, detailing products or services sold, quantities, prices, and terms of sale.