An auditor's purpose for performing tests of controls is to provide reasonable assurance that:

Multiple Choice

• Controls are operating effectively.

• The risk that the auditor may unknowingly fail to modify the opinion on the financial statements is minimized.

• Transactions are executed in accordance with management's authorization and access to assets is limited by a segregation of functions.

• Transactions are recorded as necessary to permit the preparation of the financial statements in conformity with generally accepted accounting principles.

 

The external auditors might consider the procedures performed by the internal auditors because:

Multiple Choice

• They are employees whose work must be reviewed during substantive testing.

• They are employees whose work might affect the external auditors' work.

• Their work impacts upon the cost/benefit tradeoff in evaluating inherent limitations.

• Their degree of independence may be inferred by the nature of their work.

Answer rating: 100% (QA)

Answer Correct Option A Controls are operating effectiv... View the full answer