When Evaluating the Effectiveness of a Client's Internal Controls with a Tolerable

question 4

Multiple Choice

When evaluating the effectiveness of a client's internal controls with a tolerable rate of deviation of 5 percent,the audit team determined the upper limit rate of deviation to be 4 percent.Based on this information,which of the following decisions would the audit team most likely make?

• A)Reduce the planned degree of reliance on internal controls.
• B)Increase the extent of further audit procedures.
• C)Rely on internal controls as planned.
• D)Expand the sample to examine additional applications of the control.

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