Which of the following statements relating to identifying strengths and weaknesses in a system of internal controls are true? (Select all that apply.) The auditor typically performs additional substantive testing in the areas of internal control weakness in order to identify and quantify potential material misstatement. There is no link between weaknesses in internal controls (that is, observations that controls being tested did not operate as intended) and the level of substantive procedures required. When the auditor identifies internal control weaknesses, the auditor will consider a lower assessed level of control risk approach for assertions influenced by these weaknesses. If the auditor identifies internal control weaknesses, the risk of material misstatements being undetected by management's processes and controls increases.
Which of the following statements relating to identifying strengths and weaknesses in a system of internal controls are true? (Select all that apply.) The auditor typically performs additional substantive testing in the areas of internal control weakness in order to identify and quantify potential material misstatement. There is no link between weaknesses in internal controls (that is, observations that controls being tested did not operate as intended) and the level of substantive procedures required. When the auditor identifies internal control weaknesses, the auditor will consider a lower assessed level of control risk approach for assertions influenced by these weaknesses. If the auditor identifies internal control weaknesses, the risk of material misstatements being undetected by management's processes and controls increases.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Which of the following statements relating to identifying strengths and weaknesses in a system of internal controls are true? (Select all
that apply.)
The auditor typically performs additional substantive testing in the areas of internal control weakness in order to identify
and quantify potential material misstatement.
There is no link between weaknesses in internal controls (that is, observations that controls being tested did not operate as
intended) and the level of substantive procedures required.
When the auditor identifies internal control weaknesses, the auditor will consider a lower assessed level of control risk
approach for assertions influenced by these weaknesses.
If the auditor identifies internal control weaknesses, the risk of material misstatements being undetected by management's
processes and controls increases.
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