Question

Which statement is correct when we have performed IT-substantive procedures for the period in ITGC evaluations to support our financial statement opinion?

a) IT-substantive procedures are performed to assess the effectiveness of IT general controls (ITGC) in the current period.
b) IT-substantive procedures are not relevant for financial statement opinions.
c) IT-substantive procedures are performed after issuing the financial statement opinion.
d) ITGC evaluations are not part of the overall audit process.

Answer 1

The correct statement is that IT-substantive procedures are used to assess the effectiveness of ITGC in the current period, which is essential for evaluating financial statements as part of the audit process.

Step-by-step explanation:

The correct statement when we have performed IT-substantive procedures for the period in ITGC evaluations to support our financial statement opinion is: a) IT-substantive procedures are performed to assess the effectiveness of IT general controls (ITGC) in the current period. This is because these procedures are meant to test the integrity of the data and transactions that are processed by the IT systems influencing the financial statements. ITGC evaluations are a critical part of the audit process, providing assurance that the IT systems are reliable and that the financial information generated is therefore dependable. Contrary to the options which suggest IT-substantive procedures are either not relevant or performed after the financial statement opinion, IT-substantive procedures need to be performed before the opinion is issued to form a basis for the financial statement assertions.