An Auditor May Decide not to Perform Tests of Controls

question 44

Multiple Choice

An auditor may decide not to perform tests of controls related to the control activities within the computer portion of the client's internal control.Which of the following would not be a valid reason for choosing to omit such test?

• A)The controls duplicate operative controls existing elsewhere.
• B)There appear to be major weaknesses that would preclude reliance on the stated procedure.
• C)The time and dollar costs of testing exceed the time and dollar savings in substantive testing if the tests show the controls to be operative.
• D)The controls appear adequate.

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Definitions:

Externality

A cost or benefit caused by a producer that is not financially incurred or received by that producer.

Pollution

The contamination of the environment by harmful substances or waste, leading to adverse effects on living organisms and ecosystems.

Drunk Driver

An individual who operates a vehicle under the influence of alcohol, posing significant risks to safety and public health.

Economic Efficiency

A situation where resources are allocated in the most effective way from the standpoint of societal welfare.