When inquiry, observation, and inspection are all used to trace a transaction as it is initiated, authorized, processed, and recorded, the process is called a(n)
A) inspection
B) walkthrough
C) assertion
D) analytical procedure

Question

Quizplus · Accepted Answer

The process described is a walkthrough. During a walkthrough, auditors physically follow the transaction through the various stages of the accounting system to gain a deeper understanding of the process and to identify any potential weaknesses or areas for improvement. Both inquiry and observation are key components of a walkthrough, and documentation of the process is typically created for later review and cross-checking. Inspections and analytical procedures are separate audit techniques.

When Inquiry, Observation, and Inspection Are All Used to Trace