After Obtaining an Understanding of Internal Control and Assessing Control

question 30

Multiple Choice

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

• A)a combination of limited tests of controls with analytical procedures would be more efficient and effective than detailed substantive testing.
• B)the assessed level of detection risk exceeded the assessed level of control risk.
• C)control risk should be assessed as low for key financial report assertions.
• D)the evidence that could be obtained through tests of controls would not support an assessment of control risk as less than high.

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Definitions:

Two-Party System

A political system dominated by two major parties, often leading to competition for power and influencing the political landscape of a country.

Proportional Representation

An electoral system where parties gain seats in proportion to the number of votes cast for them, as opposed to winner-take-all systems.

Two-Party System

A political system dominated by two major parties that alternately control government power, often to the exclusion of smaller parties.

Party Identification

The political party with which an individual identifies, often influencing their voting behavior and political opinions.