Question (i)

After obtaining an understanding of internal control and assessing control risk of an entity an auditor decided to perform tests of controls. The auditor most likely decided that:

A The available evidence obtained through tests of controls would not support an assessment of control risk as high.

B It would be inefficient to perform tests of controls given they would not result in reduced substantive tests.

C The assessed level of inherent risk exceeded the assessed level of control risk.

D Control risk should be assessed as low for key financial report assertions.

Question (ii)

When control risk is assessed as less than high, tests of control should be undertaken with regard to:

A Design of internal control.

B Effectiveness and continuity of controls that have been determined to exist.

C Both design and operation of internal control.

D Both the control environment and the entitys risk assessment process.