Assessing design effectiveness and conducting tests of controls are required when the auditor
A)chooses to set control risk below 100 percent and relies on the controls.
B)chooses to set control risk below 100 percent even if there is no reliance placed on controls.
C)is planning the audit.
D)tests the design effectiveness.

Question

Quizplus · Accepted Answer

Assessing design effectiveness and conducting tests of controls are required when the auditor chooses to set control risk below 100 percent and relies on the controls. This is because the auditor needs to evaluate the effectiveness of the controls in place in order to determine the level of reliance that can be placed on them. Testing the design effectiveness and conducting tests of controls are important steps in this process.

Assessing Design Effectiveness and Conducting Tests of Controls Are Required