After the auditor has prepared a flowchart of the accounting procedures and internal controls surrounding the...

After the auditor has prepared a flowchart of the accounting procedures and internal controls surrounding the revenue process and has evaluated the design of the system, he or she decides to test controls. The auditor would perform tests of controls on all internal controls:

that are most risky and that the auditor plans to rely on.

that seem to be functioning.

that would assist in preventing fraud.

documented in the flowchart.

Expert Solution

Answer. Option a is correct.

After the auditor has prepared a flowchart of the accounting procedures and internal controls surrounding the revenue process and has evaluated the design of the system, he or she decides to test controls. The auditor would perform tests of controls on all internal controls:

that are most risky and that the auditor plans to rely on.

The audit procedures performed in response to the assessed risks of material misstatement can be classified into two categories: (1) tests of controls and (2) substantive procedures.

Ordinarily, tests of controls are performed for relevant assertions for which the auditor chooses to rely on controls to modify his or her substantive procedures.

ekkarill92 answered 2 years ago

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After the auditor has prepared a flowchart of the accounting procedures and internal controls surrounding the...

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