When auditing accounts receivable, an auditor believed that the design of a particular internal control is strong. When testing that control, however, the auditor found that it wasn't working nearly as well as it should have been. There are no compensating controls. Which of the following would NOT be an appropriate response on the part of the auditor, assuming that the assertion and account involved matches the alternatives below? (Hint: Consider the effect or effects on the auditor's substantive testing of an increase in control risk in the audit risk model). ○ a) Confirm more accounts receivable than earlier planned. О b) Conduct more effective substantive tests in that area than earlier planned. ○ c) ○ d) Confirm accounts receivable as of the balance sheet date, rather than as of the date two months prior to the balance sheet date, as earlier planned. None of the above answers (a, b, c) are correct. That is, any or all of the above (a, b, c) would be appropriate responses on the part of the auditor.
When auditing accounts receivable, an auditor believed that the design of a particular internal control is strong. When testing that control, however, the auditor found that it wasn't working nearly as well as it should have been. There are no compensating controls. Which of the following would NOT be an appropriate response on the part of the auditor, assuming that the assertion and account involved matches the alternatives below? (Hint: Consider the effect or effects on the auditor's substantive testing of an increase in control risk in the audit risk model). ○ a) Confirm more accounts receivable than earlier planned. О b) Conduct more effective substantive tests in that area than earlier planned. ○ c) ○ d) Confirm accounts receivable as of the balance sheet date, rather than as of the date two months prior to the balance sheet date, as earlier planned. None of the above answers (a, b, c) are correct. That is, any or all of the above (a, b, c) would be appropriate responses on the part of the auditor.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:When auditing accounts receivable, an auditor believed that the design of a
particular internal control is strong. When testing that control, however, the auditor
found that it wasn't working nearly as well as it should have been. There are no
compensating controls. Which of the following would NOT be an appropriate
response on the part of the auditor, assuming that the assertion and account
involved matches the alternatives below? (Hint: Consider the effect or effects on the
auditor's substantive testing of an increase in control risk in the audit risk model).
○ a) Confirm more accounts receivable than earlier planned.
О
b) Conduct more effective substantive tests in that area than earlier planned.
○ c)
○ d)
Confirm accounts receivable as of the balance sheet date, rather than as of
the date two months prior to the balance sheet date, as earlier planned.
None of the above answers (a, b, c) are correct. That is, any or all of the
above (a, b, c) would be appropriate responses on the part of the auditor.
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