An Exception in a Test of Control Provides Only an Indication

question 116

True/False

An exception in a test of control provides only an indication of the likelihood of monetary misstatements in the financial statements because tests of controls do not reveal whether monetary misstatements have actually occurred.

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Definitions:

Exchange

A marketplace or platform where goods, services, or financial instruments are traded between parties.

Negotiable Instrument

A signed document that promises a specified sum of money to a specific person or entity and is transferable to others.

Substitute

A person or thing acting or serving in place of another, often used in employment or ingredient contexts.

Credit Device

A mechanism or tool, such as a credit card or loan, that extends credit to borrowers for purchases or cash advances.