In Which of the Following Situations Will Auditors Typically Rely

question 66

Multiple Choice

In which of the following situations will auditors typically rely on internal controls over financial reporting?

• A)If control risk is assessed at a high level.
• B)If the controls are determined to be designed and operating effectively.
• C)If the client asks the auditor to test controls.
• D)If the controls are sufficient to increase control risk to an acceptable level.

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Definitions:

Future Value

The value of an investment at a specific future date, including interest or dividends.

Interest Rate

The charge, delineated as a percentage of the initial amount, that a lender requires from a borrower for the utilization of assets.

One-sample Chi-square

A statistical test used to determine if a sample data matches a population with a specific distribution.

Goodness-of-fit Test

A statistical test used to determine how well observed data match the expected distribution or model.