Tests of controls in a GAAS audit are required for
A) Obtaining evidence about the financial statement assertions.
B) Accomplishing control over the occurrence of recorded transactions.
C) Applying analytical procedures to financial statement balances.
D) Obtaining evidence about the operating effectiveness of client control activities.

Question

Quizplus · Accepted Answer

Tests of controls are designed to obtain evidence about the operating effectiveness of client control activities. This is done to evaluate whether the controls are designed properly and operating effectively in achieving their intended purposes, and to determine the extent to which reliance can be placed on these controls in planning the audit. While tests of controls may provide some evidence about financial statement assertions, their primary purpose is to evaluate control risk and to determine the extent of substantive testing needed. Accomplishing control over the occurrence of recorded transactions is the ultimate goal of client control activities, not tests of controls. Analytical procedures are used to analyze financial statement balances, not to test controls.

Tests of Controls in a GAAS Audit Are Required for