The auditor can conclude that control risk is low:
A) after identifying specific controls that will reduce control risk and making an assessment of control risk.
B) after testing the controls for effectiveness.
C) after obtaining an understanding of the control environment and the accounting system at a fairly detailed level.
D) only after all three steps above are completed.

Question

Quizplus · Accepted Answer

To conclude that control risk is low, an auditor must first identify specific controls that will mitigate control risk, assess control risk, gain a detailed understanding of the control environment and the accounting system, and test the controls for effectiveness. All these steps are necessary to ensure a comprehensive evaluation of the control risk.

The Auditor Can Conclude That Control Risk Is Low