If the auditor of financial statements understands internal control and assesses control risk as low,it is assumed that internal control:
A)will be tested to support the assessment.
B)is not required to be tested as it is considered strong.
C)is considered relatively weak and will not be tested.
D)has been assessed erroneously by the auditor.

Question

Quizplus · Accepted Answer

If the auditor understands internal control and assesses control risk as low, it means the auditor believes the internal control is strong and effective. However, to support this assessment and to gather evidence, the internal control will be tested by the auditor. Therefore, choice A is correct. Choice B is incorrect because even if the control risk is assessed as low, the internal control still needs to be tested to gather evidence. Choice C is incorrect because if the control risk is assessed as low, it means the internal control is considered strong, not weak. Choice D is incorrect because if the auditor understands internal control and assesses control risk as low, the assessment is based on the auditor's professional judgement and evaluation of the evidence gathered. Therefore, the assessment is not erroneous.

If the Auditor of Financial Statements Understands Internal Control and Assesses