Obtaining positive results from testing controls means that:
Understand the Problem
The question is asking about the implications of obtaining positive results from testing controls in an auditing context, specifically regarding the auditor's reliance on internal controls and the necessity for substantive procedures.
Answer
The auditor can plan to reduce reliance on detailed substantive procedures for transactions and account balances.
The final answer is c: the auditor can plan to reduce the reliance on detailed substantive procedures for transactions and account balances.
Answer for screen readers
The final answer is c: the auditor can plan to reduce the reliance on detailed substantive procedures for transactions and account balances.
More Information
Positive results from control testing indicate that the controls are effective, allowing auditors to rely more on these controls and less on detailed tests of transactions or account balances.
Tips
A common mistake is assuming that positive test results mean no need for further substantive procedures, which is incorrect.
Sources
- Quizlet - Audit 3 Flash Cards - quizlet.com
- Chegg - Obtaining positive results from testing controls - chegg.com
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