Which of the following represents a correct statement regarding internal control testing?
A) When auditors plan to use evidence about the operating effectiveness of internal control contained in prior audits, auditing standards require tests of the controls' effectiveness at least every other year.
B) The greater the risk, the less audit evidence the auditor should obtain that controls are operating effectively.
C) The auditor uses control risk assessment and results of tests of controls to determine planned detection risk and the related substantive tests for the financial statement audit.
D) Testing of internal controls can only be performed by the auditor at the end of the fiscal year.

Question

Quizplus · Accepted Answer

Auditors use control risk assessment and results of tests of controls to determine planned detection risk and the related substantive tests for the financial statement audit. Option A is incorrect because auditing standards require auditors to test the controls' effectiveness every year, not every other year. Option B is incorrect because the greater the risk, the more audit evidence the auditor should obtain that controls are operating effectively. Option D is incorrect because testing of internal controls can be performed throughout the year, not just at the end of the fiscal year.

Which of the Following Represents a Correct Statement Regarding Internal