Directional Testing Explain the Meaning of "Directional Testing" and Identify

question 14

Essay

Directional testing Explain the meaning of "directional testing" and identify the reasons why directional testing leads to audit efficiency.Give examples of directional testing for the existence and completeness assertions.

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Definitions:

Interest Rate

The slice of a loan imposed as interest upon the borrower, usually articulated as an annual percentage of the loan still to be repaid.

Federal Income Tax

A tax imposed by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Risk

The potential for losing something of value or the uncertainty regarding the outcome of an investment or decision.