Directional testing creates audit efficiency by taking advantage of the double-entry bookkeeping system.Which of the following is not a primary reason for this effect?
A)misstatement of some accounts are more likely to occur in one direction than the other.
B)increase the persuasiveness of the evidence.
C)provides evidence on a complementary set of accounts.
D)some assertions are directional by nature.

Question

Quizplus · Accepted Answer

Directional testing focuses on testing only one direction of a transaction, which allows auditors to efficiently cover a significant portion of the financial statements. Misstatements can occur in any direction, so it is not a primary reason for why directional testing creates audit efficiency. Instead, directional testing creates efficiency by providing evidence on a complementary set of accounts, as well as by testing assertions that are directional by nature. Although directional testing may increase the persuasiveness of the evidence, this is not a primary reason for audit efficiency.

Directional Testing Creates Audit Efficiency by Taking Advantage of the Double-Entry