After obtaining an understanding of internal controls and assessing control risk on the audit of a nonpublic company,an auditor decided to perform tests of controls.The auditor most likely decided that
A) It would be efficient to perform tests of controls that would result in a reduction in planned substantive tests.
B) Additional evidence to support a further reduction in control risk is not available.
C) An increase in the assessed level of control risk is justified for certain financial statement assertions.
D) There were many internal control weaknesses that could allow errors to enter the accounting system.

Question

Quizplus · Accepted Answer

Performing tests of controls can provide evidence that the internal controls are operating effectively and can reduce the amount of substantive testing needed. This saves time and resources on the audit. Therefore, the auditor may have decided to perform tests of controls to increase the efficiency of the audit process.

After Obtaining an Understanding of Internal Controls and Assessing Control