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Jackson and Marie are sitting at lunch one day and are discussing the relationship between a client's system of internal control and substantive testing. Jackson
Jackson and Marie are sitting at lunch one day and are discussing the relationship between a client's system of internal control and substantive testing. Jackson explains to Marie that as far as he sees it, there is no relationship between these two components, and asks Marie what her understanding is. Which of the following represents Marie's best response to this question? As far as I can tell, you are exactly right. I think they just happen to represent two areas that the auditors tests. I don't believe they have to be done in any particular order either. My understanding is that there is something of an inverse relationship here. For example, if an auditor determines a client has a strong system of internal controls, they may decide to perform less substantive testing as a result. As far as I understand it, these two items work in tandem. That is to say that if an auditor performs testing on a client's system of internal controls and determines it is weak, the auditor will perform less substantive procedures in order to form an opinion on the client's financial statements. None of these answer choices are correct
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