The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the risk that:

Question

Quizplus · Accepted Answer

Choice "D" is correct. The auditor's ultimate purpose of assessing control risk is to evaluate the risk of financial statement misstatement. Choice "A" is incorrect. The auditor's evaluation of whether or not specific internal control activities are operating as designed is part of his/her assessment of control risk; however, the ultimate purpose of making this assessment is to evaluate the risk of financial statement misstatement. Choice "B" is incorrect. The auditor's evaluation of the collective effect of the control environment is part of his/her assessment of control risk; however, the ultimate purpose of making this assessment is to evaluate the risk of financial statement misstatement. Choice "C" is incorrect. Tests of controls are not used to identify activities relevant to assertions. Tests of controls are used to evaluate the operating effectiveness of internal control in preventing or detecting material misstatements.

The Ultimate Purpose of Assessing Control Risk Is to Contribute