When an Auditor Performs Tests of Details of Balances, the Concern

question 127

Multiple Choice

When an auditor performs tests of details of balances, the concern is determining:

• A) both the effectiveness of controls and the monetary correctness of the transactions.
• B) whether the deviation rate in the population is sufficiently low to justify reducing substantive testing.
• C) whether the account balance being audited is fairly stated.
• D) all of the above

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Definitions:

Financial Reports

Documents that provide an overview of a business's financial condition, including balance sheets, income statements, and cash flow statements.

Authorization Cards

Cards signed by employees to indicate their wish to be represented by a union for the purposes of collective bargaining.

Bargaining Unit

A group of employees with a clear and identifiable community of interests who are represented by a single labor union for purposes of collective bargaining.

Card Checking

A method used in labor organization activities where employees sign cards indicating their support for union representation.