Question

Working papers:

a) are necessary for the first-year auditor to keep track of the daily work but are not important to the overall audit.
b) document the results of the tests but not the purpose of the control selected for testing.
c) document the auditor's conclusion about control risk and the basis for that conclusion.
d) document the purpose of the control selected for testing and the conclusion made by the auditor but not the results of the test.

Answer 1

Working papers are crucial as they document the auditor's audit process, justifying the conclusion about control risk and detailing the tests performed, their purpose, and results.

Step-by-step explanation:

The correct answer to the student's question is option (c). Working papers document the auditor's conclusion about control risk and the basis for that conclusion. They play a critical role in the audit process by detailing what tests were performed, why they were performed, and what the results of these tests were. Contrary to option (a), they are important to the overall audit and not just for keeping track of daily work. Option (b) is partially correct but is incomplete as working papers do document the purpose of the controls selected for testing as well. Option (d) is incorrect because working papers do include the results of the tests along with the purpose of the controls and the conclusions made by the auditor.