When designing audit procedures, the direction of tests is a crucial step in satisfying the:
A) valuation objective.
B) classification objective.
C) cutoff objective.
D) completeness objective.

Question

Quizplus · Accepted Answer

The completeness objective requires the auditor to ensure that all transactions, events and information that should have been recorded have been recorded. To satisfy this objective, the auditor should design procedures that test for both overstatement (existence) and understatement (completeness) of recorded transactions. The direction of the tests must be towards searching for omissions or understatement, and not just overstating the financial statement amounts. Therefore, D is the correct choice.

When Designing Audit Procedures, the Direction of Tests Is a Crucial