Which of the following is True?
A)Tests of details of balances focus on the ending general ledger balances for both balance sheet and income statement accounts.
B)Tests of details of balances focus on the transactions during the period for both balance sheet and income statement accounts.
C)Tests of details of balances focus on the auditor's understanding of internal controls.
D)Tests of details of balances focus on comparisons of recorded amounts to expectations developed by the auditor.

Question

Quizplus · Accepted Answer

Tests of details of balances focus on verifying the ending general ledger balances for both balance sheet and income statement accounts. These tests include reconciliations, confirmations, and analytical procedures. Option B is incorrect because tests of details of balances are not focused on transactions during the period, which is the domain of tests of transactions. Option C is incorrect because tests of details of balances do not primarily focus on the auditor's understanding of internal controls, although this understanding may be relevant in selecting the appropriate test procedures. Option D is incorrect because tests of details of balances do not primarily focus on comparing recorded amounts to the auditor's expectations, although the latter may be a factor in assessing the likelihood of misstatements.

Which of the Following Is True