Auditors will have more confidence in internal controls and audit evidence generated internally _______.
A)with a client that maintains an effective control environment
B)with a client that maintains a poor control environment
C)if the controls are centralized and controlled by one department
D)if the audit evidence is received from one department of function only

Question

Quizplus · Accepted Answer

Auditors will have more confidence in internal controls and audit evidence generated internally if the client maintains an effective control environment. A well-designed control environment helps ensure the reliability of financial reporting, compliance with laws and regulations, and effective and efficient operations. This, in turn, allows auditors to rely on the internal controls more and reduce their substantive testing procedures. The other options, such as a poor control environment, centralized controls, or evidence from only one department, would not instill as much confidence in the auditors.

Auditors Will Have More Confidence in Internal Controls and Audit