When the Auditor Has Assessed Control Risk of a Particular

question 93

Multiple Choice

When the auditor has assessed control risk of a particular area at a reduced level, he or she will then:

• A) proceed to expand the sample sizes in that area.
• B) test the effectiveness of the controls in that area.
• C) negotiate with management to determine which controls will be tested in that area.
• D) eliminate the need to gather evidence in that area.

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Definitions:

Bonds Outstanding

The total amount of issued bonds by a corporation or government entity that have not yet been redeemed or reached their maturity date.

After-tax Cost

The expense of an investment or financial activity after accounting for taxes.

Tax Rate

The tax rate imposed by governmental authorities on the income of persons or businesses.