While Substantive Procedures May Support the Accuracy of Underlying Records

question 45

Multiple Choice

While substantive procedures may support the accuracy of underlying records, these tests frequently provide no affirmative evidence of segregation of duties because:

• A)substantive procedures rarely guarantee the accuracy of the records if only a sample of the transactions has been tested.
• B)the records may be accurate even though they are maintained by persons having incompatible functions.
• C)substantive procedures relate to the entire period under audit, but compliance tests ordinarily are confined to the period during which the auditor is on the entity's premises.
• D)many computerized procedures leave no audit trail of who performed them, so substantive procedures may necessarily be limited to inquiries and observation of office personnel.

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Definitions:

Random Variable

A quantity whose value is subject to variations due to chance (statistical randomness).

Numerical Description

The summary or representation of data through numbers, including measures of central tendency and variability.

Experiment

A process that generates well-defined outcomes.

Expected Value

The long-run average value of repetitions of the experiment it represents, reflecting the probability-weighted average of all possible values.