Which of the following statements is true relating to internal control testing?
A)testing of controls is the most cost-efficient way of designing each audit
B)there is a point where further testing of controls becomes more expensive than performing substantive tests
C)substantive testing is the most cost-efficient way of designing each audit
D)as the work of testing of controls increases,the cost of substantive work increases

Question

Quizplus · Accepted Answer

There is a point in the testing of controls where the cost of further testing exceeds the cost of performing substantive tests. As a result, auditors must exercise professional judgment and determine at what point to stop testing controls and shift to substantive tests. Therefore, statement A and D are incorrect, and statement C is not entirely accurate as substantive testing may also be expensive depending on the context.

Which of the Following Statements Is True Relating to Internal