A)Describe the Five Types of Audit Tests Used to Determine

question 22

Essay

A)Describe the five types of audit tests used to determine whether financial statements are fairly stated.Identify which types are substantive tests and which are used to reduce assessed control risk.B)There are several types of audit procedures that relate to the auditor's understanding of internal control.One type of procedure is to update and evaluate the auditor's previous experience with the entity.Identify the four additional types of procedures related to understanding internal control.

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Definitions:

Net Float

Net float is the difference between the amount of checks written by a company and the amount that has been cleared and charged to the company's account, affecting its available balance.

Collection

The process of obtaining payment on outstanding accounts or the grouping of specific items, as in art or stamps.

Disbursements Float

The time difference between when a payment is made by a firm and when the funds are actually withdrawn from the firm's bank account.

Preauthorized Payments

Automated payments set up to charge a bank account or credit card for recurring bills or subscriptions on a pre-set schedule.