In short
Tests of controls are audit procedures that evaluate whether controls operated effectively throughout the period. They are performed when the auditor plans to rely on controls or when substantive procedures alone can't give enough evidence.
Key takeaways
- Methods include inquiry combined with observation, inspection of evidence and reperformance; inquiry alone is never enough.
- Evidence that controls operate effectively allows a lower assessment of control risk.
- Automated controls may need testing only once if general information technology controls are effective.
Where it's tested
AUD: Responding to Assessed Risks — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Tests of controls are performed to: