Question: Auditing standards indicate that if the preliminary control risk assessment is low, the auditor must gain assurance that the controls are operating effectively. a. What

Auditing standards indicate that if the preliminary control risk assessment is low, the auditor must gain assurance that the controls are operating effectively.
a. What is meant by testing the operating effectiveness of control procedures? How does an auditor decide which controls to test?
b. How is the auditor's assessment of control risk affected if a documented control procedure is not operating effectively? Explain the effect of such an assessment on substantive audit procedures.

Step by Step Solution

★★★★★

3.29 Rating (161 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Testing the operating effectiveness of control is accomplished through tests of controls This typi... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

330-B-A-A-B-R (1043).docx

120 KBs Word File

Students Have Also Explored These Related Auditing Questions!

Auditing standards indicate that if control risk is assessed as low or moderate, the auditor must gain assurance that the controls are operating effectively. Required a. What is meant by testing the...

How does an investor decide where to be on the new efficient frontier represented by the CML?

An auditor may perform tests of controls and substantive procedures simultaneously as a matter of audit convenience. However, the substantive procedures and sample size are, in part, dependent upon...

Book Name: Auditing Case An Interactive Learning Approach 6th Edition Case Number# 9.6 Hooplah, Inc. page:29 Your audit firm, Garrett and Schulzke LLP, is engaged to perform the annual audit of...

Need help with these multiple choice questions for internal audit final exam. Due in 2 hours. QUESTION 1 RsQ_004Without management direction and assumption of responsibility, it would be...

If possible pls help me with this via email as the answer should be limited to one individual per submission. again pls if possible thru email antonionlyfans6969 g mail.com Prepare a word doc., about...

repare a word doc., about 1 page long where you discuss: 1. Fraud risk assessment (describe only 3 risk factors and how might the related accounts and relevant assertions be affected) 3. Exceptions...

Jay and Mike are opening a paint store. There are no competing paint stores in the area. They must decide how to organize the business. They anticipate profits of $ 300,000 the first year, with the...

Explain why a company might want to split its shares.

Calculate Net Present Value (NPV) for a project with a projected gross annual cash inflow of $700 and associated annual expenses of $200. The initial investment required for the project is $1,500....

Differentiate first-degree murder from first-degree capital or aggravated homicide.

How would an auditor go about assessing management integrity? Why management integrity is considered the most important factor affecting the client acceptance or continuation decision?

What are the primary factors an auditor will want to investigate before accepting a new audit client?

The expected dividends of a stock over the next 3 years are $1.5,$0, and $2.5 per share, respectively. The stock price is estimated at $21.5 at the end of 3 . The required rate of return on this...

) An 18-month 100 zero-coupon bond sells for 93. A 3-year 100 zero-coupon bond sells for 84. Using semi-annual compounding (i.e. every 6 months), find the forward rate between 18-months and 36-...

5. Binary erasure channel (15 points). A binary erasure channel has binary input X e {0, 1} and ternary output Y E {0, 1, 2} (see the probability transition diagram below). The erasure, represented...