After Obtaining an Understanding of Internal Controls and Assessing Control

question 84

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:

Theory of Personality

A systematic approach to understanding the differences and characteristics that make up an individual's personality.

Rep Test

The Role Construct Repertory Test, a psychological test used to assess an individual's personal construct system.

Personal Constructs

Theory positing that individuals interpret the world and phenomena through a system of personal constructs, which are dichotomous mental representations.

Possible Selves

The various identities an individual imagines they might become, which can include hopes, fears, goals, and expectations for the future.