Question

If the control environment is assessed to be weak, _______.

1) the auditors should immediately consider withdrawal from the engagement
2) the auditors should address this by changing the audit plan to include more audit procedures and expanding the scope of the audit to include more of the client's locations
3) the auditors should plan to increase their reliance on the evidence generated by the system
4) the auditors should plan to increase their reliance on the internal audit function

Answer 1

If the control environment is weak, auditors should increase reliance on evidence generated by the system and on the internal audit function.

Step-by-step explanation:

If the control environment is assessed to be weak, the auditors should plan to increase their reliance on the evidence generated by the system and also increase their reliance on the internal audit function. These actions are taken to compensate for the weaknesses in the control environment and to obtain sufficient audit evidence. By relying more on the evidence generated by the system, the auditors can perform additional tests and procedures on the system to ensure accuracy and reliability of financial information. Additionally, by increasing their reliance on the internal audit function, the auditors can leverage the work performed by the internal auditors to gain assurance over the client's controls.