In order to obtain audit evidence about account balances, many tests of controls may be enhanced by the added activity of tracing the sampled items from the inventory compilation report and verifying that the compilation amounts agree with the general ledger. This enhanced test would be considered a:
A) substantive procedure.
B) dual-purpose test.
C) walkthrough.
D) physical inventory count.

Question

Quizplus · Accepted Answer

This enhanced test of tracing the sampled items from the inventory compilation report and verifying that the compilation amounts agree with the general ledger serves a dual purpose of testing controls (tracing the items) and substantive testing (verifying the amounts), hence it is a dual-purpose test.

In Order to Obtain Audit Evidence About Account Balances, Many