Computer Services Company (CSC) processes payroll transactions for schools. Drake, CPA, is engaged to report on CSC's internal controls placed in operation as of a specific date. These internal controls are relevant to the schools' internal control, so Drake's report will be useful in providing the schools' independent auditors with information necessary to plan their audits. Drake's report expressing an opinion on CSC's internal controls placed in operation as of a specific date should contain a(an):

Question

Quizplus · Accepted Answer

Choice "A" is correct. A report on internal controls for a service organization should include a description of the scope and nature of Drake's procedures. Choice "B" is incorrect. No statement is made in the report that all design deficiencies have been disclosed. Choice "C" is incorrect. The service auditor's opinion is not intended to provide evidence of operating effectiveness. Choice "D" is incorrect. No paragraph indicating the basis for the assessment of control risk is included in Drake's report.

Computer Services Company (CSC) Processes Payroll Transactions for Schools