During Substantive Testing, If Material Misstatements Have Been Found to Exist

question 11

Multiple Choice

During substantive testing, if material misstatements have been found to exist, which of the following actions should be taken next?

• A)Proceed to the audit completion in the reporting phase
• B)Re-evaluate the audit risk in the planning phase
• C)Re-perform detailed tests of balances
• D)Re-perform an internal controls systems analysis

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Definitions:

Capital

The assets, including money, that a person or organization possesses or has available for specific uses like launching a business or making investments.

Cash

Represents money or any instrument that banks accept for deposit and immediate credit to a company’s account, such as checks or money orders.

Expenses

Costs incurred by a business in the process of earning revenue, such as rent, salaries, and utilities.

Assets

Assets held by a business anticipated to deliver future economic advantages.