If, when obtaining an understanding of control activities of a relatively small client, the auditor identified no control activities, the auditor would probably set a high assessment of control risk.

Question

Quizplus · Accepted Answer

If the auditor identifies no control activities, it means that there are no procedures or policies in place to ensure that transactions are properly recorded and processed. Therefore, the auditor would have no basis for relying on any internal controls and would likely set a high assessment of control risk.

If, When Obtaining an Understanding of Control Activities of a Relatively