Question

An exception or deficiency found in a test of controls

A. indicates a financial statement misstatement.
B. indicates the likelihood of a misstatement.
C. indicates that the financial statements are fairly stated.
D. indicates that an adverse opinion is warranted on the audit of internal control.

Answer 1

The correct answer to the following question is option B) indicates the likelihood of a misstatement .

Step-by-step explanation:

The term test of controls can be defined as an audit procedure which is designed in such a way that it will help in evaluating the operational effectiveness of controls in correcting, preventing material misstatements at assertion level . So if any exception is found in the test of controls then it will likely indicate the likelihood of a misstatement .