When Control Risk Is Assessed as High the Auditor Needs

question 104

Multiple Choice

When control risk is assessed as high the auditor needs to:

• A)perform more tests of controls.
• B)perform more direct testing of account balances.
• C)perform significantly fewer tests of controls.
• D)perform significantly less testing of account balances.

---

Definitions:

Depreciation

The gradual reduction in the economic value of the physical assets of a company due to wear and tear over time, or the loss in value of a currency.

NDP

Net Domestic Product; it calculates the total value of all goods and services produced within a country in a specific period minus depreciation.

Intermediate Product

Goods that are used in the production process to make other goods, rather than being bought by consumers.

National Income Accountants

Specialists who compile national accounts, a system of accounts that provides detailed information on the economic activities and output of a nation, such as GDP, national income, and expenditure.