An auditor is least likely to test the internal controls that provide for
A) Approval of the purchase and sale of marketable securities.
B) Classification of revenue and expense transactions by product line.
C) Segregation of the functions of recording disbursements and reconciling the bank account.
D) Comparison of receiving reports and vendors' invoices with purchase orders.

Question

Quizplus · Accepted Answer

Internal controls that classify revenue and expense transactions by product line are not typically tested by auditors as such controls do not have a significant impact on the overall financial statements. The other options listed (A, C, and D) are important internal controls that auditors are likely to test as they have a direct impact on the accuracy of the financial statements.

An Auditor Is Least Likely to Test the Internal Controls