One typical difference between the asset prepaid expenses and other assets, such as accounts receivable and inventory, is the immateriality of the former in many audits.Because of this immateriality, frequently the only audit procedure necessary to perform is:
A) tests of transactions.
B) tests of control.
C) analytical procedures.
D) tests of details of balances.

Question

Quizplus · Accepted Answer

Since prepaid expenses are typically immaterial assets, the only audit procedure necessary to perform is usually analytical procedures. This involves analyzing trends and relationships in financial data to identify possible anomalies or errors. Tests of transactions, tests of control, and tests of details of balances are likely to be unnecessary or insufficient in detecting material misstatements for prepaid expenses in many audits.

One Typical Difference Between the Asset Prepaid Expenses and Other