Question

Auditors will have more confidence in internal controls and audit evidence generated internally _______.

1) with a client that maintains an effective control environment
2) with a client that maintains a poor control environment
3) if the controls are centralized and controlled by one department
4) if the audit evidence is received from one department or function only

Answer 1

Auditors will have more confidence in internal controls and audit evidence generated internally 1. with a client that maintains an effective control environment. A poor control environment or receiving information.

Step-by-step explanation:

Auditors place greater confidence in internal controls and internally generated audit evidence when the client maintains an effective control environment. An effective control environment is characterized by robust policies and procedures, diligent oversight, and a culture that emphasizes integrity and ethical behavior. On the other hand, auditors are more skeptical about the reliability of internal controls and evidence when the control environment is poor. When controls are centralized and controlled by just one department, or when audit evidence is received only from one department, it could lead to a higher risk of error or fraud, and therefore less confidence from auditors.

• Auditors will have more confidence with a client that maintains an effective control environment.
• A poor control environment makes auditors skeptics about the internal controls and audit evidence.
• The centralization of controls or evidence from a single department could increase the risk of error or fraud.