Which statement is correct concerning the relevance of various types of controls to a financial statement audit?
A)An auditor may ordinarily ignore the consideration of controls when a substantive audit approach is used.
B)Controls over the reliability of financial reporting are ordinarily most directly relevant to an audit,but other controls may also be relevant.
C)Controls over safeguarding assets and liabilities are of primary importance,while controls over the reliability of financial reporting may also be relevant.
D)All controls are ordinarily relevant to an audit.

Question

Quizplus · Accepted Answer

Controls over the reliability of financial reporting are most directly relevant to an audit, but other controls may also be relevant. The auditor must consider all relevant types of controls, including those over the safeguarding of assets and liabilities, as well as those over the reliability of financial reporting. However, the primary focus of the audit is on the accuracy and completeness of the financial statements, which is directly related to the controls over financial reporting. Therefore, controls over financial reporting are given the most attention during an audit.

Which Statement Is Correct Concerning the Relevance of Various Types