Compared to balance sheet accounts, the audit of income statement accounts generally relies more heavily on:
A) tests of detail of balances.
B) tests of detail of transactions.
C) analytical procedures.
D) both tests of detail of balances and of transactions.
E) tests of controls.

Question

Quizplus · Accepted Answer

Analytical procedures are more heavily relied upon in the audit of income statement accounts because they help in understanding the trends and ratios that are not apparent from merely looking at the balances. These procedures are effective in identifying unusual transactions or events, and inconsistencies in financial information.

Compared to Balance Sheet Accounts, the Audit of Income Statement