A procedure that would most likely be used by an auditor in performing tests of control procedures that involve segregation of functions and that leave no transaction trail is:
A) reconciliation.
B) inspection.
C) observation.
D) reperformance.

Question

Quizplus · Accepted Answer

When segregation of functions is involved and there is no transaction trail, it is likely that the auditor would use observation to perform tests of control procedures. By observing the employees performing their assigned duties, the auditor can determine if appropriate segregation of functions is taking place. Reconciliation, inspection, and reperformance are typically used when transaction trails are present, making observation the best choice.

A Procedure That Would Most Likely Be Used by an Auditor