When a client uses a service organization to process certain transactions (e.g. ,its employee benefit plan),the auditor is least likely to obtain an understanding relating to these transactions by A)Contacting the service organization to obtain specific information. B)Visiting the service organization and performing procedures. C)Sending a confirmation request to the service organization. D)Obtaining and reading a Type 1 or Type 2 report from the service organization.

Question

Quizplus · Accepted Answer

Sending a confirmation request to the service organization is not an effective way to obtain an understanding of the transactions processed by the service organization. This is because a confirmation request only asks for specific information and does not provide the auditor with a comprehensive understanding of the service organization's processes and controls. The other choices (A, B, and D) are more effective ways for the auditor to obtain an understanding: contacting the service organization, visiting the service organization, or obtaining and reading a Type 1 or Type 2 report from the service organization.

When a Client Uses a Service Organization to Process Certain