If tests of controls result in identified control deficiencies,how will the auditor assess those deficiencies?
A)By estimating interest expense based on average interest rates and average debt outstanding.
B)By comparing current year account balances with prior year account balances.
C)By determining their severity and the impact on the opinion of internal control effectiveness.
D)By calculating the long-term debt-to-equity ratio and performing a trend analysis with prior periods.

Question

Quizplus · Accepted Answer

If tests of controls result in identified control deficiencies, the auditor will assess those deficiencies by determining their severity and the impact on the opinion of internal control effectiveness. The severity of the deficiencies can determine whether they are significant deficiencies or material weaknesses, and the impact on the opinion of internal control effectiveness will influence the auditor's overall evaluation of the company's financial statements. Options A, B, and D are unrelated to the assessment of control deficiencies.

If Tests of Controls Result in Identified Control Deficiencies,how Will