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”During the interim audit, you performed internal controls testing and the results of these indicate that, to date, the control environment is strong and internal controls are operating effectively.
James has asked you to explain the factors that will determine the extent of further work on internal controls that will need to be performed at the final audit.
Which of the following should be taken into account when determining the extent of the additional work needed at the final audit?answer includes: (3) The length of the remaining period”
So the length is said to be considered.. um I don’t quite understand WHY. can you help please…
I thought of length as in time and this should never decide the extent of procedures as that’s related to ROMM..
Suppose the y/e is 31 December. In order to reduce substantive procedures by relying on the effective operation of controls – see the overview at the beginning of chapters 7/8 – it is necessary to show that controls have been effective throughout the period. So surely you can see that it would make a difference whether tests of controls were carried out in July – covering 6/7 months – or in November – covering 10/11 months.
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