External auditors typically conduct compliance testing because
A) the main goal of a financial statement audit is to ensure that internal controls are operating effectively.
B) compliance tests yield more reliable evidence than substantive tests.
C) compliance tests determine how much reliance can be placed on the internal controls in substantive tests.
D) compliance testing can be conducted solely by the internal auditors.

Question

Quizplus · Accepted Answer

Compliance testing helps external auditors determine the effectiveness of internal controls and how much they can rely on them in conducting substantive tests. This ensures that the financial statements are fairly presented and comply with relevant regulations and standards.

External Auditors Typically Conduct Compliance Testing Because