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 often performed prior to the client's fiscal year-end to assess the effectiveness of internal controls and the accuracy of transactions. This can inform the auditor's approach to the extent of tests of details of balances needed.

Tests of Controls and Substantive Tests of Transactions Are an Important