After Obtaining an Understanding of a Client's IT Control, an Auditor

question 76

Multiple Choice

After obtaining an understanding of a client's IT control, an auditor may decide not to perform tests of controls within the IT portion of the client's system. Which of the following would not be a valid reason for choosing to omit tests of controls?

• A) There appear to be major deficiencies that preclude reliance on the stated procedure.
• B) The time and dollar costs of testing controls exceed the savings in substantive testing if the tests show the controls to be operative.
• C) The controls appear to be adequate and thus can be relied upon in assessing the level of control risk.
• D) The controls duplicate controls existing elsewhere in the system.

---

Definitions:

Complementary Goods

Products or services that are typically used together, where the increase in consumption of one leads to an increase in consumption of the other.

Good X

A term used to denote a specific product or commodity in economic models.

Substitute Goods

Products or services that can be used in place of each other, where an increase in the price of one leads to an increase in demand for the other.

Demand

Demand refers to the quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.