Shown Below (1 Through 5)are the Five Types of Tests

question 65

Multiple Choice

Shown below (1 through 5) are the five types of tests which auditors use to determine whether financial statements are fairly stated.Which three are substantive tests?
1) Risk assessment procedures
2) Tests of controls
3) Tests of transactions
4) Substantive analytical procedures
5) Tests of details of balances

• A)1, 2, and 3.
• B)3, 4, and 5.
• C)2, 3, and 5.
• D)2, 3, and 4.

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Definitions:

Unenforceable

A term describing a contract or agreement that, due to certain defects or circumstances, cannot be legally compelled or executed.

Promise

An assurance given by one party to another agreeing to do or not do something in the future.

Agreement in Principle

An initial acceptance indicating a preliminary agreement before the details are finalized.

Binding Contract

An agreement between two or more parties that is legally enforceable in a court of law.