A procedure that would most likely be used by an auditor in performing tests of control activities that involve segregation of functions but which leave no transaction trail is:
A)Inspection.
B)Observation.
C)Reperformance.
D)Reconciliation.

Question

Quizplus · Accepted Answer

When segregation of functions leaves no transaction trail, an auditor may choose to use observation to test control activities. Observation involves physically observing individuals performing their duties, which allows the auditor to assess compliance with segregation of function policies. This method is effective for identifying any potential breakdowns in segregation and ensuring that controls are operating effectively. Inspections, reperformance, and reconciliations may not be applicable in this scenario, as they are typically used for testing other types of control activities.

A Procedure That Would Most Likely Be Used by an Auditor