Which of the following substantive tests would the auditor conduct as a search for contingent liabilities?
A)select an attribute sample of legal expenses for matching to invoices
B)select a dollar unit sample of legal expenses for matching to invoices
C)inspect legal expense invoices and perform a census test of legal expenses
D)review a sample of legal invoices,looking for appropriate authorization for payment

Question

Quizplus · Accepted Answer

Inspecting legal expense invoices and performing a census test of legal expenses would be the most appropriate substantive test to search for contingent liabilities. This test would allow the auditor to identify any potential contingent liabilities from legal expenses incurred by the company. Selecting an attribute or dollar unit sample would not be sufficient as it may not capture all the relevant expenses. Reviewing a sample of legal invoices for appropriate authorization would not necessarily identify contingent liabilities.

Which of the Following Substantive Tests Would the Auditor Conduct