Which of the following statements is true regarding the appropriate audit procedures to perform for debt and stockholder's equity accounts?

Question

Quizplus · Accepted Answer

When auditing debt accounts, including interest, the auditor typically uses substantive procedures because the completeness and accuracy of these accounts are readily determinable. In contrast, for stockholders' equity accounts, the auditor may use both control procedures and substantive procedures due to the greater risk of fraud and errors in these accounts. Option B is incorrect because testing debt obligations is not typically accomplished using only control procedures. Option C is also incorrect because the auditor may use both control procedures and substantive procedures when auditing debt obligations, depending on the assessed risk. Option D is not accurate because option A is true.

Which of the Following Statements Is True Regarding the Appropriate