Which of the following should be done by the auditor if tests of controls indicate that a key control is not functioning as designed?
A)Increase the assessed level of control risk
B)Increase the level of assessed detection risk
C)Stabilize the nature, timing, and extent of substantive tests related to the assertion
D)Rely on external controls

Question

Quizplus · Accepted Answer

If tests of controls indicate that a key control is not functioning as designed, the auditor should increase the assessed level of control risk. This is because if the key control is not functioning properly, there is a higher risk that material misstatements may occur in the financial statements, and the auditor cannot rely on the control to mitigate that risk.

Which of the Following Should Be Done by the Auditor