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:

Shipworkers' Trade Union

An organization that represents the interests and rights of workers in the shipping or maritime industry.

Labour Relations Board

A regulatory body that oversees and enforces labor laws related to the rights of employers and employees, including union activities and collective bargaining.

Union Representation

The act of labor unions representing the interests of their members in negotiations with employers.

Organization Drive

A campaign or effort undertaken by a union or group to recruit new members or to form a new union within a workplace.