Tests of controls and substantive tests of transactions are an important determinant of the extent of the auditor's use of tests of details of balances.Which of the following is True?
A)They are likely to be performed prior to the client's end of the fiscal year.
B)They are likely to eliminate the need for tests of details of balances.
C)They are likely to have no impact on the planned tests of details of balances.
D)They are likely to be used only in the audit of internal control.

Question

Quizplus · Accepted Answer

Tests of controls and substantive tests of transactions are typically performed before the end of the client's fiscal year to provide evidence of the effectiveness of controls and the accuracy of transaction processing. While they can reduce the extent of testing needed for details of balances, they do not eliminate the need entirely. These tests are also used in the audit of both internal control and financial statements.

Tests of Controls and Substantive Tests of Transactions Are an Important