While substantive procedures may support the accuracy of underlying records,these tests frequently provide no affirmative evidence of segregation of duties because
A) Substantive procedures rarely guarantee the accuracy of the records if only a sample of the transactions has been tested.
B) The records may be accurate even though they are maintained by persons having incompatible functions.
C) Substantive procedures relate to the entire period under audit, but compliance tests ordinarily are confined to the period during which the auditor is on the entity's premises.
D) Many computerized procedures leave no audit trail of who performed them, so substantive procedures may necessarily be limited to inquiries and observation of office personnel.

Question

Quizplus · Accepted Answer

Substantive procedures focus on verifying the accuracy and completeness of underlying records, but they do not usually provide affirmative evidence of segregation of duties. This is because even if the records are accurate, they may be maintained by individuals who have incompatible functions, which undermines the principle of segregation of duties. Therefore, the best answer is B, which recognizes that substantive procedures do not guarantee segregation of duties. The other answer choices are incorrect for various reasons: A is partially true, but it does not address the issue of segregation of duties; C is incorrect because compliance tests can be performed for the entire period under audit; and D is also partially true, but it confuses audit trails with segregation of duties.

While Substantive Procedures May Support the Accuracy of Underlying Records,these