Rosie Garaga spent the past week designing audit procedures to evaluate the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements of a major bookstore operation at the assertion level. What types of audit procedures did she employ?
A) entity-level controls
B) detective controls
C) tests of controls
D) preventive controls

Question

Quizplus · Accepted Answer

The types of audit procedures described in the question - evaluating the operating effectiveness of controls in preventing, detecting, and correcting material misstatements at the assertion level - are typically tests of controls. Tests of controls are performed to obtain evidence about the operating effectiveness of specific controls, whereas preventive controls are designed to prevent errors from occurring in the first place and detective controls are designed to identify errors after they occur. Entity-level controls, while important, are not specific audit procedures used to evaluate controls at the assertion level.

Rosie Garaga Spent the Past Week Designing Audit Procedures to Evaluate