Describe the Five Types of Audit Tests Used to Determine

question 50

Essay

Describe the five types of audit tests used to determine whether financial statements are stated fairly.Identify which of the five types are substantive tests and which are used to reduce assessed control risk.

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Definitions:

Additional Costs

Are extra costs that may not have been initially accounted for or that occur beyond the expected costs of production or operations.

Additional Benefits

The perks or supplementary advantages that come in addition to the primary benefits of a product, service, or policy.

Marginal Analysis

Marginal Analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity.

Relevant Costs

Only those costs that will be affected by a decision or action and therefore should be considered in decision-making.