When a compensating control exists, a deficiency in the system:
A) is reduced but not removed; therefore, it is still of concern to the auditor.
B) is no longer a concern because the potential for misstatement has been sufficiently reduced.
C) could cause a material loss, so it must be tested using substantive procedures.
D) is magnified and must be removed from the sampling process and examined in its entirety.

Question

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The Answer of When a compensating control exists, a deficiency in the system:
A) is reduced but not removed; therefore, it is still of concern to the auditor.
B) is no longer a concern because the potential for misstatement has been sufficiently reduced.
C) could cause a material loss, so it must be tested using substantive procedures.
D) is magnified and must be removed from the sampling process and examined in its entirety.

When a Compensating Control Exists, a Deficiency in the System