When designing tests of details of balances, an important point to remember is
A) auditors emphasize income statement accounts.
B) the audit procedures selected depends heavily on whether planned evidence for a given objective is low, medium, or high.
C) if accounts receivable are overstated, then sales will be understated.
D) sales cutoff is the most important test of details of accounts receivable.

Question

Quizplus · Accepted Answer

The audit procedures selected for tests of details of balances depend heavily on whether planned evidence is low, medium, or high for a given objective. This is an important point for auditors to remember when designing tests of details of balances. Options A, C, and D are not accurate statements in the context.

When Designing Tests of Details of Balances, an Important Point