Which of the following is the auditor least likely to consider when developing the overall audit strategy?

The following questions concern the overall audit strategy and audit program, including selection of the type of test to perform. Choose the best response.
a. In the financial statement audit of a nonpublic company, the auditor decides to per-
form tests of the controls related to the occurrence of sales transactions. Which of the
following best explains why the auditor decided to test these controls?
(1) In a nonissuer financial statement audit, the auditor is required to test the operat-
ing effectiveness of internal controls.
(2) The auditor wants to obtain an understanding of the design of the internal controls.
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446Part 2 / THE AUDIT PROCESS
(3) Control risk is assessed at below the maximum.
(4) The auditor wants to obtain an understanding of the implementation of the in-
ternal controls.
b. Substantive analytical procedures are most likely to be used to test which of the fol-
lowing accounts?
(1) Interest income
(2) Cash
(3) Accounts payable
(4) Treasury stock
c. Which of the following is the auditor least likely to consider when developing the
overall audit strategy?
(1) Complexity of the company’s operations
(2) Evaluation of accounts receivable confirmations
(3) Preliminary judgment about materiality
(4) The economic conditions affecting the industry in which the company operates

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