After Obtaining an Understanding of the Internal Control System and Assessing

question 24

Multiple Choice

After obtaining an understanding of the internal control system and assessing control risk,an auditor decided not to perform additional tests of controls.The auditor most likely concluded that ________.

• A)the additional evidence to support a further reduction in control risk was not cost-beneficial
• B)the assessed level of inherent risk exceeded the assessed level of control risk
• C)the internal control system was properly designed and justifiably may be relied on
• D)the evidence obtainable through tests of controls would not support an increased level of control risk

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Definitions:

Central Tendency

A statistical measure that identifies a single value as representative of the middle or typical value of a dataset, commonly found using mean, median, or mode.

Variation

The occurrence of differences among individuals, groups, or populations, often leading to evolutionary change.

Standard Deviation

A statistical measure that represents the dispersion or variance in a set of data points from its mean.

Measure of Variation

A statistical tool used to describe the distribution or spread of data points in a dataset, common measures include variance, standard deviation, and range.