Management is responsible for designing the controls and the auditor is responsible for
A)testing them only if he chooses to rely on them to prevent or detect misstatements in the account balances.
B)testing them only if he chooses to rely on them to prevent or detect misstatements in the transactions.
C)testing them only if he chooses to rely on them to prevent or detect misstatements in the financial statements.
D)testing them only if he chooses to rely on them to prevent or detect misstatements in the management representations.

Question

Quizplus · Accepted Answer

Management is responsible for designing controls to prevent or detect misstatements in the financial statements. The auditor is responsible for testing those controls only if he or she chooses to rely on them to support a reduced level of substantive testing. Therefore, the auditor's responsibility is to test the controls only if he or she chooses to rely on them to prevent or detect misstatements in the financial statements.

Management Is Responsible for Designing the Controls and the Auditor