An exception or deficiency found in a test of controls
A) indicates a financial statement misstatement.
B) indicates the likelihood of a misstatement.
C) indicates that the financial statements are fairly stated.
D) indicates that an adverse opinion is warranted on the audit of internal control.

Question

Quizplus · Accepted Answer

An exception or deficiency in a test of controls indicates the likelihood of a misstatement in the financial statements, but it does not necessarily mean there is a misstatement. The auditor needs to assess the impact and materiality of the exception or deficiency to determine its significance. This may result in a qualified or adverse opinion on the audit of internal control, but it does not necessarily mean the financial statements are misstated or that an adverse opinion is warranted.

An Exception or Deficiency Found in a Test of Controls