Reference no: EM132683934

Problem 1: After obtaining an understanding of internal control and assessing control risk of an entity an auditor decided to perform tests of controls. The auditor most likely decided that:

A The available evidence obtained through tests of controls would not support an assessment of control risk as high.

B It would be inefficient to perform tests of controls given they would not result in reduced substantive tests.

C The assessed level of inherent risk exceeded the assessed level of control risk.

D Control risk should be assessed as low for key financial report assertions.

Problem 2: When control risk is assessed as less than high, tests of control should be undertaken with regard to?

A Design of internal control.

B Effectiveness and continuity of controls that have been determined to exist.

C Both design and operation of internal control.

D Both the control environment and the entity's risk assessment process.