You are auditing Rodgers and Company. After performing substantive analytical procedures, you conclude that, for the accounts tested, the client's balance appears reasonable. This may indicate that
A) details test of balances can be eliminated for those accounts.
B) certain tests of details of balances may be eliminated for those accounts.
C) control tests may be eliminated for those accounts.
D) control tests may be reduced for those accounts.

Question

Quizplus · Accepted Answer

Substantive analytical procedures provide evidence about the reasonableness of an account balance. However, it is not sufficient to conclude that no further testing is required. Certain tests of details of balances should still be performed to obtain more assurance about the accuracy and completeness of the balance. Therefore, choice B is the best answer. Choices A, C, and D are not appropriate because they suggest eliminating or reducing testing, which is not supported by the conclusion of substantive analytical procedures.

You Are Auditing Rodgers and Company