An Auditor Concludes That the Internal Controls Are Operating Effectively

question 13

Multiple Choice

An auditor concludes that the internal controls are operating effectively when in fact they are not. This most likely would result in:

• A) reduced audit testing.
• B) increased detection risk.
• C) increased audit risk.
• D) All of the above.

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Definitions:

Financial Record

A financial record is documentation of financial transactions and positions of an individual or organization, essential for financial management and accountability.

Receipt

A written acknowledgment that something of value, or a service, has been transferred from one party to another.

Encounter Form

A document used in healthcare settings to record services provided to a patient during a visit, assisting in billing and medical records.

Credit Balances

Situations in financial accounting where a customer has paid more than the total amount due for goods or services, resulting in a surplus in their account.