A substantive strategy is typically used to audit stockholders' equity because:
A)the number of transactions is small.
B)controls over stockholders' equity transactions typically are weak.
C)a reliance strategy is most efficient.
D)a substantive strategy likely was used in prior years.

Question

Quizplus · Accepted Answer

A substantive strategy is often used to audit stockholders' equity because the number of transactions affecting stockholders' equity is usually small, making it more efficient to directly verify the amounts rather than assess and test control processes.

A Substantive Strategy Is Typically Used to Audit Stockholders' Equity