An internal auditor performed a test of controls and found that a statistically selected representative sample of recorded transactions within the account receivables ledger had an error rate that…

Question

Options

• AThe auditor should state that the error rate was within the selected confidence level.
• BNegative assurance should be provided, as the associated revenue account was not examined.
• CThe auditor should state that controls over the recording of transactions in the revenue account are
• DPositive assurance could be provided for the effectiveness of the accounts receivable controls.

• A
  6% (2)
• B
  16% (5)
• C
  28% (9)
• D
  50% (16)

Explanation

In this scenario, the internal auditor performed a test of controls on the accounts receivable ledger and found that the error rate was within management's expectations. Since the audit focused on the accounts receivable controls, the conclusion should be specific to the scope of the engagement. The auditor can provide positive assurance about the effectiveness of the controls over the recording of transactions in the accounts receivable ledger, as the evidence gathered supports this conclusion.

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