When designing tests of controls, the emphasis is on testing controls that:
A) are material.
B) the auditor intends to rely on to reduce control risk.
C) the auditor believes may not be functioning effectively.
D) are associated with material account balances.

Question

Quizplus · Accepted Answer

The emphasis of tests of controls is on testing controls that the auditor intends to rely on to reduce control risk. This means that these controls are deemed important for the auditor's assessment of the effectiveness of internal controls over financial reporting. Materiality or association with material account balances is not necessarily the determining factor in these tests. The auditor may also consider the risk of fraud, the nature of the control, and the experience of the company in implementing and monitoring these controls.

When Designing Tests of Controls, the Emphasis Is on Testing