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Bob and Casey, two audit staff associates are discussing audit procedures for the upcoming audit of Yacht LLC, a purveyor of luxury sailing boats to

Bob and Casey, two audit staff associates are discussing audit procedures for the upcoming audit of Yacht LLC, a purveyor of luxury sailing boats to clients in the United States and Europe. In particular, Bob and Casey are discussing the nature, timing and extent of audit procedures that they will likely be involved in undertaking. Which of the following statements best describes an example of an audit procedure that may be conducted??

The auditor is likely to request the internal audit function test all internal controls employed by the client. Once this is complete, the internal audit function should provide a formal written report to the external auditors, for inclusion in the permanent audit file.
A specific audit procedure may be conducted closer to the end of the audit, especially for accounts and transactions that the auditor has determined represent decreased audit risk.
With respect to the extent of a particular audit procedure, the auditors may decide to increase sample size if detection risk has been assessed as low, and conversely decrease sample size if detection risk has been assessed as high.
The auditors are likely to perform substantive procedures, including substantive tests of details on the client's internal controls. These procedures are to designed to ensure that client-designed internal controls are operating effectively.

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