The auditor uses substantive tests of balances to
A)gather evidence for income statement accounts in the business process
B)gather evidence for balance sheet accounts in the business process
C)determine the valuation of income statement accounts in the business process
D)determine the valuation for balance sheet accounts in the business process

Question

Quizplus · Accepted Answer

Substantive tests of balances are used to gather evidence for balance sheet accounts in the business process. These tests help the auditor determine whether the account balances are fairly stated and whether they are supported by appropriate documentation and underlying transactions. Substantive tests of balances are not typically used to gather evidence for income statement accounts, as those accounts are usually tested through substantive tests of transactions.

The Auditor Uses Substantive Tests of Balances to