An auditor wishes to perform tests of controls on a client's cash disbursements relating to accounts payable.If the control procedures leave no audit trail of documentary evidence,the auditor most likely will test the procedures by:
A)Confirmation and observation.
B)Observation and inquiry.
C)Analytical procedures and confirmation.
D)Inquiry and analytical procedures.

Question

Quizplus · Accepted Answer

Since there is no audit trail of documentary evidence, the auditor will have to rely on observation and inquiry to test the procedures. Observation involves physically observing the procedures being carried out, while inquiry involves asking questions of the client to gather information about the procedures. These techniques can help the auditor to assess the effectiveness of the control procedures, even in the absence of documentary evidence. Confirmation and analytical procedures may not be relevant or useful in this situation, as they require a reliable source of data or information to be available.

An Auditor Wishes to Perform Tests of Controls on a Client's