Question
Which of the following conclusions drawn by the auditor is most valid? Please tell me the reason. A. Although the sample deviation rate, upon completion
Which of the following conclusions drawn by the auditor is most valid? Please tell me the reason.
A. Although the sample deviation rate, upon completion of the tests of controls, was found to be higher than the tolerable deviation rate, none of the deviations resulted in a misstatement in the financial report assertion. The auditor, therefore, concludes that the control activity can be relied on.
B. The control activity that the auditor was planning to rely on was found, upon completion of the tests of controls, to be ineffective and there are no compensating controls that the auditor can identify or wishes to test. The auditor, therefore, plans to achieve a lower level of detection risk than originally anticipated.
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