The purpose of tests of controls is to provide reasonable assurance that the
A)accounting treatment of transactions and balances is valid and proper.
B)accounting control procedures are operating effectively.
C)entity has complied with the disclosure requirements of a generally accepted accounting framework.
D)entity has complied with requirements of quality control.

Question

Quizplus · Accepted Answer

Tests of controls are specifically designed to evaluate the effectiveness of an entity's accounting control procedures. The purpose is to provide reasonable assurance that those controls are operating effectively to prevent or detect material misstatements in the financial statements. While tests of controls may indirectly provide some assurance regarding the validity and propriety of accounting treatment and compliance with disclosure requirements, these are not the primary purposes of such testing. Quality control requirements are also not directly addressed through tests of controls.

The Purpose of Tests of Controls Is to Provide Reasonable