Performance of tests of controls provide evidence in support of the specific controls that contribute to the auditor's assessed control risk (where it is reduced below 100%).Also,when dual-purpose tests are used,evidence is also obtained in support of
A)the nature of illegal acts that occurred.
B)the quantitative effects of fraud risks.
C)statistical ratios to assist analytical review.
D)monetary correctness of transactions.

Question

Quizplus · Accepted Answer

Performance of tests of controls provides evidence in support of the monetary correctness of transactions. Dual-purpose tests also yield evidence of monetary correctness in addition to evidence in support of the tests of controls. Option A is incorrect because tests of controls do not provide evidence of the nature of illegal acts that occurred. Option B is incorrect as tests of controls and dual-purpose tests do not provide evidence of quantitative effects of fraud risks. Option C is incorrect as statistical ratios serve to assist in analytical review, but do not provide evidence in support of control risks or fraud risks.

Performance of Tests of Controls Provide Evidence in Support of the Specific