Question

When would an auditor typically not perform additional tests of a computer systems controls?

A) When the assessed level of control risk is at a minimum.
B) When computer controls appear to be strong and risk is at a minimum.
C) When controls appear to be weak.
D) When inherent risk is at a maximum.`

Answer 1

An auditor would not perform additional tests of a computer system's controls when the control risk is assessed to be very low, indicating that the existing controls are effective. This typically occurs when either the control risk or overall risk is at a minimum, not when controls are weak or inherent risk is high.

Step-by-step explanation:

An auditor typically would not perform additional tests of a computer system's controls when the assessed level of control risk is at a minimum. The rationale behind this is that when control risks are assessed to be very low, it implies that the existing controls are believed to be effective in preventing or detecting errors or fraud in the computer system. This situation corresponds to option A). Similarly, an auditor may not perform additional tests if computer controls appear to be strong and the overall risk associated with these controls is also assessed to be at a minimum, which is implied in option B). However, when controls appear to be weak or when inherent risk is at a maximum, the auditor would typically perform additional tests to gain assurance that the financial statements are free from material misstatement.