Concludes the controls related to accounts receivable

Reference no: EM131125148

Assume the auditor concludes the controls related to accounts receivable are operating effectively based on inquiry and other appropriate tests. Which of the following is a correct inference regarding the auditor's conclusion?

a. The auditor will not need to perform direct tests on the valuation of accounts receivable.

b. The auditor could not have concluded that the internal controls over credit were effective unless the auditor determined that the credit limits are updated for changed conditions.

c. The auditor does not need to confirm accounts receivable because the risk of a material misstatement of receivables is mitigated by the controls.

d. The auditor does not need to perform any more direct tests of the account balances if the auditor has tested the IT general controls.

Reference no: EM131125148

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