If the Auditors Do not Perform Tests of Controls for Certain

question 45

Multiple Choice

If the auditors do not perform tests of controls for certain assertions:

• A)They have performed a substandard audit.
• B)They are not required to communicate significant deficiencies relating to those accounts to management and the board of directors.
• C)They must issue a qualified opinion.
• D)They must assess control risk at the maximum level for those assertions.

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Definitions:

Predicted Values

The outcomes or values estimated based on a mathematical model or prediction equation.

Y-intercept

The point on a graph where a line intersects the Y-axis, often used to represent the starting value of a relationship in linear equations.

Slope

Measures the steepness or incline of a line, calculated as the ratio of vertical change to horizontal change between any two points on the line.

F Statistic

A ratio of variances used in the analysis of variance (ANOVA) to assess the significance of the difference between group means.