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:

Non-breaching Party

In a contractual agreement, the party that has not failed to fulfill their contractual obligations and has been wronged by the other party's breach.

Reasonable

The term 'reasonable' is used to describe actions or decisions that are logical, fair, and sensible, based on the circumstances.

UCC Rule

Refers to regulations established under the Uniform Commercial Code, a comprehensive set of laws governing all commercial transactions in the United States.

Payment Term

A condition that outlines the agreement between a buyer and a seller regarding the amount and timing of payments for goods or services.