When the auditor considers that the service organization activities are significant to the client and relevant to the audit and he concludes that it would be efficient to obtain audit evidence from tests of control to support an assessment of control risk at a lower level. Such evidence may be obtained by, exceptSelect one:a.Performing tests of the client's controls over activities of the service organization.b.Review the service contract between the client and the service organization.c.Obtaining a service organization auditor's report that expresses an opinion as to the operating effectiveness of the service organization's accounting and internal control systems for the processing applications relevant to the auditd.Visiting the service organization and performing tests of control.Clear my choice

Which of the following is the least concern of the client auditor in reviewing the report of service organization auditor on suitability of internal control design of the service organization?Select one:a.The type of documentation of the understanding of the service organization's control system.b.The systems' controls have been placed in operation.c.The accounting and internal control systems are suitably designed to achieve their stated objectives.d.The accuracy of description of the service organization's accounting and internal control systems, ordinarily prepared by the management of the service organization.

Understanding the business and using this information appropriately assists the auditor in, exceptSelect one:a.Planning and performing the audit effectively and efficiently.b.Evaluating audit evidence.c.Assessing risks and identifying potential problemsd.Deciding whether to do tests of controls

The auditor should consider whether the assessment of control risk is confirmedSelect one:a.Before the final audit program is completed.b.Upon completion of understanding of internal control.c.Upon the conclusion of the audit, based on the results of substantive procedures and other audit evidence obtained.d.Upon completion of tests of controls

Factors to consider include:The nature, scope, intended use and purpose of the service.The degree of reliance that will be placed on the outcome of the service in the audit.The legal and regulatory environment in which the service is provided.Whether the client is a public interest entity.Whether it is material;The degree of subjectivity involved.The client’s level of expertise concerning the type of service provided.Whether the outcome will affect the accounting records or matters reflected in the financial statements, and, if so:Whether it is material;The degree of subjectivity involved.The extent of the client’s involvement in determining significant matters of judgment.The degree of reliance that will be placed on the outcome of the service in the audit.Whether the client is a public interest entity.The fee for the NAS.

A proper understanding of the client's internal control is an integral part of the audit planning process. The results of the understandingSelect one:a.Bear no relationship to the extent of substantive testing to be performed.b.May be used as the basis for withdrawing from an audit engagement.c.Must be reported to the shareholders and the SEC.d.Are not reported to client management.