The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?
A) control tests
B) substantive analytical procedures
C) risk assessment procedures
D) tests of operating effectiveness of controls over revenue and cash

Question

Quizplus · Accepted Answer

Substantive analytical procedures are designed to identify fluctuations or relationships in financial data that could indicate a potential error or fraud. These procedures involve comparing financial statement balances to expectations based on prior periods or industry benchmarks to identify anomalies that require further investigation. Therefore, this would be the best choice for detecting possible monetary errors in the financial statements. Option A (control tests) focuses on testing the effectiveness of internal controls. Option C (risk assessment procedures) is performed to identify risks and vulnerabilities that could impact the financial statements. Option D (tests of operating effectiveness of controls over revenue and cash) is also focused on assessing the effectiveness of internal controls rather than detecting monetary errors.

The Auditor Would Design Which of the Following Audit Tests