There will be heavy emphasis on tests of controls when
A)controls are ineffective and assessed control risk is high.
B)controls are effective and assessed control risk is low.
C)the auditor is doing a "fraud audit."
D)it is a first-year audit.

Question

Quizplus · Accepted Answer

When controls are effective and the assessed control risk is low, auditors place heavy emphasis on tests of controls to gain assurance that the controls are operating effectively throughout the period under audit. This approach allows the auditor to potentially reduce the extent of substantive testing.

There Will Be Heavy Emphasis on Tests of Controls When