The following situations will likely lead the auditor to use 100% testing, exceptSelect one:a.When the population constitutes a small number of large value items.b.When both inherent and control risks are high and other means do not provide sufficient appropriate audit evidencec.When the repetitive nature of a calculation or other process performed by a computer information system makes a 100% examination cost effective.d.When testing controls that leave audit trail.
Question
The following situations will likely lead the auditor to use 100% testing, exceptSelect one:a.When the population constitutes a small number of large value items.b.When both inherent and control risks are high and other means do not provide sufficient appropriate audit evidencec.When the repetitive nature of a calculation or other process performed by a computer information system makes a 100% examination cost effective.d.When testing controls that leave audit trail.
Solution
The correct answer is d. "When testing controls that leave audit trail."
This is because testing controls that leave an audit trail does not necessarily require 100% testing. Auditors can use sampling techniques to test these controls. If the sample results are satisfactory, the auditor can conclude that the controls are effective. This is unlike the other situations where 100% testing may be necessary due to high risk or cost effectiveness.
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