Which of the following is not done by an auditor when obtaining an understanding of an entity's internal controls? * t
Answers
Explanation:
When obtaining an understanding of an entity's internal controls, an auditor ... Bank reconciliations are not performed on a timely basis.
Missing: t | Must include: t
Answer:
The auditor may decide that assessing control risk at or below the maximum level fn 3 for certain statements would be more effective and efficient than doing solely substantive tests.
Explanation:
The auditor may decide that assessing control risk at or below the maximum level fn 3 for certain statements would be more effective and efficient than doing solely substantive tests.
Furthermore, the auditor may assess that executing solely substantive tests for one or more financial statement claims is not practicable or viable in order to reduce detection risk to an acceptable level. In such cases, the auditor should acquire evidence on the efficiency of control design and operation in lowering the assessed level of control risk.
Such evidence may be gathered via control tests that are prepared and executed concurrently with or after gaining the knowledge. fn 4 Such evidence may also be gathered using processes that were not explicitly designed for this purpose.
#SPJ2