According to the PCAOB,during the audit of internal controls for an issuer,the ultimate objective of testing the design effectiveness of internal controls is to
A) Determine whether the company's controls are processing company data effectively.
B) Determine that the company's controls will satisfy the company's control objectives and can effectively prevent or detect errors or fraud that could result in material misstatements, if they operate as prescribed.
C) Determine that the company's employees are processing the controls according to the policy and procedure manuals at the company.
D) None of the above.

Question

Quizplus · Accepted Answer

The ultimate objective of testing the design effectiveness of internal controls during the audit of internal controls for an issuer is to determine that the company's controls will satisfy its control objectives and effectively prevent or detect errors or fraud that could result in material misstatements if they operate as prescribed. Therefore, option B is the correct answer. Option A focuses only on the processing of company data, and option C focuses only on whether employees are following policies and procedures, which are not the ultimate objective of testing the design effectiveness of internal controls. Option D is incorrect because there is a correct choice.

According to the PCAOB,during the Audit of Internal Controls for an Issuer,the