The results of the tests of controls determine whether assessed control risk for sales and cash receipts needs to be revised.

Question

Quizplus · Accepted Answer

The tests of controls are designed to evaluate the effectiveness of the internal controls in place, and determine whether they can be relied upon to prevent or detect material misstatements in the financial statements. Based on the results of these tests, the auditor can determine whether assessed control risk needs to be revised for the relevant accounts and assertions.

The Results of the Tests of Controls Determine Whether Assessed