If Tests of Controls Reveal That Controls Are Sufficiently Effective

question 93

True/False

If tests of controls reveal that controls are sufficiently effective to justify reducing control risk, the auditor is justified in reducing substantive audit tests.

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Definitions:

European Recovery Plan

Also known as the Marshall Plan; an American initiative passed in 1948 for foreign aid to Western Europe, aimed at rebuilding European economies after the end of World War II.

Western Europe Prosperity

Refers to the high standard of living and economic success experienced by Western European countries, particularly during the post-World War II era due to recovery efforts and economic integration.

Cold War

A period of geopolitical tension between the Soviet Union and the United States and their respective allies from the late 1940s to the early 1990s, characterized by rivalry, propaganda, and proxy wars.