IS auditors are MOST likely to perform compliance tests of
internal controls if, after their initial evaluation of the
controls, they conclude that:
A. a substantive test would be too costly.
B. the control environment is poor.
C. inherent risk is low.
D. control risks are within the acceptable limits.
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Answer Posted / guest
Answer: D
IS auditors perform tests of controls (compliance testing)
to assess whether control risks are within acceptable
limits. The results of the compliance testing would
influence the IS auditor's decisions as to the extent of
tests of balance (substantive testing). If compliance
testing confirms that the control risks are within an
acceptable level, then the extent of substantive testing
would be reduced. During the testing phase of an audit, an
IS auditor does not know whether the controls identified
operate effectively. Tests of controls, therefore, evaluate
whether specific, material controls are, in fact reliable.
Performing test of controls may conclude that the control
environment is poor, but it is not the objective of
compliance testing. Inherent risks cannot be determined by
performing a test of controls.
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