After Obtaining an Understanding of the Entity's Internal Control and Assessing

question 103

Multiple Choice

After obtaining an understanding of the entity's internal control and assessing control risk,an auditor of a nonpublic company decided not to perform additional tests of controls.The auditor most likely concluded that the

• A) Additional evidence to support an additional reduction in control risk was not cost beneficial.
• B) Assessed level of inherent risk exceeded the assessed level of control risk.
• C) Internal control structure was properly designed and justifiably may be relied on.
• D) Evidence obtainable through tests of controls would not support an increased level of control risk.

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Definitions:

DSM

The Diagnostic and Statistical Manual of Mental Disorders, a resource used by healthcare professionals as the authoritative guide to diagnosing mental disorders.

Double ABC-X Model

A framework for understanding how families adapt to stress and crises, focusing on variables that influence the coping process.

Internal Contextual Variables

Factors within an organization or individual that influence behavior, decisions, or actions, including beliefs, attitudes, and internal environment.

Boss

A person who is in charge of a worker or organization, responsible for directing and overseeing the work of others.