The Objective of Tests of Details of Transactions Performed as Tests

question 430

Multiple Choice

The objective of tests of details of transactions performed as tests of controls is to:

• A) Monitor the design and use of entity documents such as prenumbered shipping forms.
• B) Determine whether internal controls have been implemented.
• C) Detect material misstatements in the account balances of the financial statements.
• D) Evaluate whether internal controls operated effectively.

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Definitions:

Sample Proportion

The fraction or percentage of a sample that exhibits a particular attribute or characteristic.

Probability

A measure of the likelihood that an event will occur, ranging from 0 (impossibility) to 1 (certainty).

Population Proportion

The fraction of the population that holds a particular trait, attribute, or characteristic of interest.

Standard Error

An estimate of the standard deviation of the sampling distribution of a statistic, often used to assess the precision of sample estimates of population parameters.