Early substantive testing of balances is only done when
A)the client has a good system of internal controls relating to expense account balances
B)the client has good policies and procedures relating to the expense account balances
C)the client has a good system of internal controls relating to the account balances
D)the client has good policies and procedures relating to the account balances

Question

Quizplus · Accepted Answer

Early substantive testing of balances is done when the client has a good system of internal controls relating to the account balances. Good policies and procedures may indicate a strong control environment, but it is the presence of effective internal controls that justifies early substantive testing.

Early Substantive Testing of Balances Is Only Done When