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:

Countersignature

An additional signature required on a document or check to verify or approve its legitimacy, often used for security or authorization purposes.

Paper Currency

Legal tender issued by a government or central bank in the form of paper notes.

Negotiable Instrument

A signed document promising a sum of payment to a specified person or the assignee which is transferable by endorsement.

Sum Certain

A specific, agreed-upon amount of money owed under a contract that is not subject to change.