Stockholders' equity accounts typically will be tested with only substantive analytical procedures.

Question

Quizplus · Accepted Answer

Stockholders' equity accounts are important and significant accounts that are subject to material misstatement due to potential fraud or errors. As a result, substantive tests of details are typically necessary to obtain sufficient and appropriate audit evidence. Analytical procedures alone are not enough to provide the level of assurance required by audit standards.

Stockholders' Equity Accounts Typically Will Be Tested with Only Substantive