The purpose of tests of controls is to determine whether ________.
A)internal control policies and procedures are working as prescribed
B)substantive testing can be kept to a minimum
C)errors and irregularities are prevented or detected in a timely manner
D)the auditor has an understanding of the control system

Question

Quizplus · Accepted Answer

Tests of controls are conducted to determine whether internal control policies and procedures are functioning effectively and as intended. These tests are performed to assess the risk of material misstatement in the financial statements, and they help auditors determine whether they can rely on the effectiveness of internal controls in planning and performing substantive audit procedures. Tests of controls are not designed to detect errors or irregularities but to provide assurance that the internal control system is working as expected.

The Purpose of Tests of Controls Is to Determine Whether