What does the audit strategy known as 'reliance on controls approach' mean?
Understand the Problem
The question is asking about the audit strategy known as 'reliance on controls approach' and what it signifies. It involves evaluating different options related to the strategy's appropriateness and requirements concerning internal controls.
Answer
Requires the auditor to conduct extensive control testing.
The audit strategy known as 'reliance on controls approach' requires the auditor to conduct extensive control testing.
Answer for screen readers
The audit strategy known as 'reliance on controls approach' requires the auditor to conduct extensive control testing.
More Information
The 'reliance on controls approach' involves the auditor conducting extensive testing of an entity's internal controls. This is to ensure controls are operating effectively and reduces the need for detailed substantive testing.
Tips
A common mistake is assuming minimal control testing is required. In reality, this approach depends heavily on testing controls comprehensively.
Sources
- Chegg - Audit strategy - chegg.com
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