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Questions and Answers
Substantive tests are performed to reduce the level of detection risk to an acceptable level.
True
Substantive tests are only performed after assessing the control risk.
True
Analytical procedures are only used in the planning stage of the audit.
False
Test of details of balances is used for accounts with smaller volumes representing material amounts.
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The result of tests of controls is a major factor in determining the nature, timing, and extent of substantive tests.
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Analytical procedures are used to detect material misstatements in the financial statements.
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Accounts that are subject to management discretion are generally predictable.
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Test of details of balances is used for accounts affected by large volumes of relatively immaterial transactions.
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The timing of substantive tests does not affect the extent of evidence needed to satisfy a particular objective.
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The result of tests of controls is the only factor in determining the nature, timing, and extent of substantive tests.
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