After Obtaining an Understanding of Internal Controls and Assessing Control

question 7

Multiple Choice

After obtaining an understanding of internal controls and assessing control risk of an entity, an auditor decided not to perform tests of controls for purposes of the audit. The auditor most likely decided that:

• A)the available evidential matter obtained through tests of controls would not support an increased level of control risk.
• B)a reduction in the assessed level of control risk is justified for certain financial statement assertions.
• C)it would be inefficient to perform tests of controls that would result in a reduction in planned substantive procedures.
• D)the assessed level of inherent risk exceeded the assessed level of control risk.

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Definitions:

File Name

The unique identifier for a file on a computer system, which consists of a name and sometimes a path.

ReadLine

The ReadLine method is commonly used in programming to read a single line of input from the user or a file.

Read

The process of retrieving data from a source, such as a file or database.

BufferedReader

A class in Java used to read text from an input stream, buffering characters to provide efficient reading of characters, arrays, and lines.