Which of the following is not true about auditing stockholders' equity transactions?
A)The auditor usually uses a substantive approach.
B)The number of equity transactions with outside parties is usually small.
C)The dollar amount is usually immaterial.
D)An approach using only tests of details is most commonly used to audit equity accounts.

Question

Quizplus · Accepted Answer

The dollar amount involved in stockholders' equity transactions is usually material, not immaterial, because these transactions can significantly affect the financial position of a company. Equity transactions often involve large amounts of money, such as issuing or buying back shares, which can have a substantial impact on the financial statements.

Which of the Following Is Not True About Auditing Stockholders