Internal Control and Risk Assessment Practice Question

Question

A student must apply the concept rather than define it only for the CPA AUD Auditing and Attestation involving tests of controls in Internal Control and Risk Assessment. Which option best reduces risk or error? (Item 207)

Answer choices

  1. A. Skip verification because the previous case had the same answer.
  2. B. Document nothing because documentation could create follow-up questions.
  3. C. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the tests of controls scenario.
  4. D. Rely on informal custom instead of the applicable rule, control, or standard.

Correct Answer

C. The best answer is to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting for the tests of controls scenario.

Explanation

The correct answer is C because tests of controls is tested by asking candidates to select the audit response that best supports sufficient appropriate evidence, professional skepticism, and proper reporting. The distractors reflect common exam mistakes: ignoring context, using informal shortcuts, skipping verification, or applying a rule from the wrong domain.

Question details

  • Difficulty: medium
  • Domain: Internal Control and Risk Assessment
  • Objective: tests of controls

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