2. Where do you think you might identify the following control deficiency during the course of the audit?"Inadequate segregation of incompatible duties that undermines design effectiveness"
A.When understanding and performing the walkthroughs of processes
B.When understanding the business and its environment in which it operates
c.When determining the appropriate personnel to form the audit team
D.When communicating the control deficiencies found to management
A. When understanding and performing the walkthroughs of processes, an auditor would likely identify inadequate segregation of incompatible duties that undermine design effectiveness. During walkthroughs, the auditor examines how transactions flow through the client's systems, which includes assessing the segregation of duties as a key control activity. If there is inadequate segregation of duties, this would be evident when observing and testing the client's internal control activities.
