A financial statement auditor concludes that internal controls over cash are not functioning as designed.She believes that material misstatements to the cash accounts are possible because of the deficiencies.What course of action is the auditor most likely to take?
A)Report the audit to the regulatory agencies of the IRS and SEC.
B)Develop specific tests for cash balances to determine the extent of misstatement.
C)Explain to the client that the audit firm will not be able to complete the audit.
D)Test the internal control over cash.

Question

Quizplus · Accepted Answer

The auditor will develop specific tests for cash balances to determine the extent of any misstatements due to the deficiencies in internal controls.

A Financial Statement Auditor Concludes That Internal Controls Over Cash