When completing the audit of internal controls for an issuer,AS 5 requires auditors to test
A) Operating effectiveness only.
B) Design effectiveness only.
C) Both operating and design effectiveness.
D) Neither operating nor design effectiveness

Question

Quizplus · Accepted Answer

AS 5 requires auditors to test both operating and design effectiveness of internal controls during the audit. Operating effectiveness is tested to evaluate whether the control is functioning effectively to achieve the intended objectives. Design effectiveness is tested to evaluate whether the control is appropriately designed to prevent or detect material misstatements. Therefore, both operating and design effectiveness must be tested as per AS 5.

When Completing the Audit of Internal Controls for an Issuer,AS