Each key control that the auditor intends to rely on must be supported by sufficient:
A) tests of transactions.
B) tests of controls.
C) reperformance procedures.
D) analytical review procedures.

Question

Quizplus · Accepted Answer

Key controls are controls that are identified by the auditor as being essential to preventing or detecting material misstatements. In order to rely on these key controls, the auditor must perform tests of controls to ensure that they are operating effectively. Therefore, choice B, tests of controls, is the best choice.

A is incorrect because tests of transactions relate to the completeness and accuracy of individual transactions, rather than the effectiveness of key controls.

C is incorrect because reperformance procedures would only be necessary if the auditor did not have access to the original documentation or evidence, and would not necessarily be a requirement for supporting key controls.

D is incorrect because analytical review procedures may provide some evidence of the effectiveness of key controls, but in and of themselves would not be sufficient to support reliance on these controls.

Each Key Control That the Auditor Intends to Rely on Must