There Are Three Phases in the Risk Response Category of the Audit

question 47

Multiple Choice

There are three phases in the risk response category of the audit process (design further audit procedures, tests of control, substantive tests) . When will the auditor conduct tests of controls?

• A) when there are poor internal controls
• B) if the auditor plans to rely upon them
• C) when a substantive audit approach is selected
• D) when there are low risks of material error

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Definitions:

Time Inconsistency

The tendency of individuals to change their plans about future actions due to a change in their preferences over time.

Self-Control

The capacity to manage one’s feelings, cognitions, and actions when confronted with desires and sudden urges.

Current Consumption

The total amount of goods and services consumed by individuals or a nation at the present time.

Global Epidemic

A widespread occurrence of an infectious disease across multiple countries or continents simultaneously.