Which of the Following Represents a Correct Statement Regarding Internal

question 78

Multiple Choice

Which of the following represents a correct statement regarding internal control testing?

• A) When auditors plan to use evidence about the operating effectiveness of internal control contained in prior audits, auditing standards require tests of the controls' effectiveness at least every other year.
• B) The greater the risk, the less audit evidence the auditor should obtain that controls are operating effectively.
• C) The auditor uses control risk assessment and results of tests of controls to determine planned detection risk and the related substantive tests for the financial statement audit.
• D) Testing of internal controls can only be performed by the auditor at the end of the fiscal year.

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Definitions:

Frequency Distributions

Representations of the number of observations within a given interval. The distribution shows the frequencies of different outcomes in a sample.

Normal Distributions

A probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Mathematical Formulas

Prescribed sets of mathematical symbols and operations that represent relationships or solve problems.

Inferential Statistics

The branch of statistics that allows one to make predictions or inferences about a population based on a sample of data from that population.