If Internal Controls Are Tested and Are Considered Effective, the Auditor

question 83

True/False

If internal controls are tested and are considered effective, the auditor generally will increase both substantive tests of transactions and tests of details of balances.

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Definitions:

Land

A real estate property consisting of the earth's surface, along with any attached natural resources and rights.

Disposal of Asset

The process of selling, scrapping, or otherwise removing an asset from a company's balance sheet, often due to obsolescence, surplus, or a strategic shift.

Note Payable-State Bank

A debt obligation in the form of a written promissory note made to a state bank, specifying the terms under which repayment will be made.

Collateralized Borrowing

Obtaining a loan by pledging an asset as security for the loan, which the lender can seize if the borrower defaults.