For A through F place an X in the box (for Situation 1 or Situation 2)which is most accurate for each statement below;if for any question you believe that the situations are the same relating to that question place an X in each of the two boxes.
In both situations assume inherent risk is at a high level.
Situation 1: While obtaining an understanding of internal control,you have determined that it appears to be very strong. You choose not to test controls in the area.
Situation 2: While obtaining an understanding of internal control,you have determined that it appears to be adequate-not strong,not weak. You choose to test controls in the area-they reveal that the system functions as expected.

\begin{array}{|l|l|l|l|}\hline &&\text { Situation } 1 &\text { Situation } 2\\\hline \text { A } & \begin{array}{l}\text { The planned assessed level of control risk is } \\\text { lower for this situation. }\end{array} \\\hline \text { B. } & \begin{array}{l}\text { The planned allowable detection risk is lower for } \\\text { this situation. }\end{array} \\\hline \text { C. } & \begin{array}{l}\text { More tests of controls will be performed for this } \\\text { situation. }\end{array} \\\hline \text { D. } & \begin{array}{l}\text { More substantive procedures will be performed } \\\text { for this situation. }\end{array} \\\hline \text { E. } & \begin{array}{l}\text { The assessed level of control risk will be lower } \\\text { for this situation. }\end{array} \\\hline \text { F. } & \begin{array}{l}\text { The risk of misstatement will be lower in this } \\\text { situation. }\\\end{array}\\\hline\end{array}

The Sarbanes-Oxley Act of 2002 Requires That the Audit Committee

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