Auditors typically rely on internal controls of their private company clients
A) only as needed to complete the audit and satisfy Sarbanes-Oxley requirements.
B) only if the controls are determined to be effective.
C) only if the client asks an auditor to test controls.
D) only if the controls are sufficient to increase control risk to an acceptable level.

Question

Quizplus · Accepted Answer

Auditors rely on internal controls of their private company clients if they determine them to be effective. Internal controls are a crucial aspect of a company's financial reporting process, and auditors must evaluate their effectiveness to form an opinion on the company's financial statements. Auditors do not rely on internal controls only as needed or if the client asks them to test the controls, but they do rely on them if they are effective in reducing the control risk to an acceptable level.

Auditors Typically Rely on Internal Controls of Their Private Company