Internal Control and Risk Assessment Practice Question

Question

A learner is comparing two similar concepts 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 67)

Answer choices

  1. A. Document nothing because documentation could create follow-up questions.
  2. B. Rely on informal custom instead of the applicable rule, control, or standard.
  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. Skip verification because the previous case had the same answer.

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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