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Wyoming CPAs have just received a Service Organization and Controls (SOC) 1, Type 2 report from a service auditor in conjunction with the audit of
Wyoming CPAs have just received a Service Organization and Controls (SOC) 1, Type 2 report from a service auditor in conjunction with the audit of Johnson Enterprises, LLC. Johnson CPAs are discussing how receipt of this report may affect the audit. Which of the following statements is true with respect to the action Wyoming CPAs may decide to take? Wyoming CPAs should look to confirm the conclusions reached in the service auditor's report by requesting a separate service auditor perform the same tests. Wyoming CPAs should adhere to generally accepted auditing standards which do not permit the auditor to assess control risk below the maximum level based on the service auditor's report. If the service auditor did not note any exceptions in the service companies internal control, Wyoming CPAs should plan to rely on the report and may assess control risk lower than the maximum. Wyoming CPAs should consider adopting a reliance strategy whereby the report of the service auditor is relied upon, and Wyoming CPAs plan more substantive procedures in these areas to compensate
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