After finishing the review phase of the study and evaluation of internal control in an audit engagement, the auditor should perform tests of controls on:
A) those controls that have a material effect upon the financial statement balances.
B) a random sample of the controls that were reviewed.
C) those controls that the auditor plans to rely upon.
D) those controls in which significant deficiencies were identified.

Question

Quizplus · Accepted Answer

The auditor should perform tests of controls on those controls that they plan to rely upon. This is because these controls are considered to be important for the prevention or detection of errors or fraud in the financial statements. Performing tests of controls on controls that have a material effect upon the financial statement balances or on a random sample of controls that were reviewed may not be sufficient to provide assurance that the controls are functioning effectively. Similarly, testing controls in which significant deficiencies were identified may be important, but it is not sufficient for the auditor to rely on these controls without further testing.

After Finishing the Review Phase of the Study and Evaluation