Question

If internal control is effective, the auditor may confine his work to a representative number of transactions and avoid detailed verification.

• A. Effective, audit procedures
• B. Low, practice
• C. Ineffective, audit procedure
• D. High, accounting work

Hint:

Strong internal controls are key to reducing audit time and enhancing organiza tional efficiency

Answer 1

The Correct Option is A

Effective internal controls, such as automated systems and segregation of duties, enhance reliability in financial reporting. They minimize errors and fraud risks, allowing auditors to perform sampling rather than a full review. For example, if an organization has strong controls over cash transactions, the auditor can focus on testing the controls and verifying only a sample of transactions instead of all entries. This approach saves time and resources while ensuring accurate audit outcomes.