If No Material Differences Are Found Using Analytical Procedures, and the Auditor

question 65

Multiple Choice

If no material differences are found using analytical procedures, and the auditor concludes that misstatements are not likely to have occurred,

• A) other substantive tests may be reduced.
• B) it will be necessary to increase the tests of balances.
• C) it will not be necessary to perform tests of balances.
• D) it will be necessary to increase the tests of transactions.

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Definitions:

Income Statement

A financial document that shows a company's revenues, expenses, and net income over a specific period, typically a quarter or year.

Balance Sheet

A document that provides a snapshot of an organization's financial status by listing its assets, obligations, and the equity of its shareholders at a given time.

Account Balances

The amount of money in a financial repository at any given moment, which can change with deposits and withdrawals.

Deposits

Sums of money placed into an account in a bank or other financial institution, typically earning interest and used for saving or as collateral.