In a Financial Report Audit, Substantive Tests Are Audit Procedures

question 48

Multiple Choice

In a financial report audit, substantive tests are audit procedures that:

• A) a re designed to discover significant subsequent events.
• B) may be either tests of transactions, tests of balances, tests of disclosure or analytical procedures.
• C) will decrease proportionately with the auditor's assessed level of control risk.
• D) may be eliminated under certain conditions.

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Definitions:

Interest Rate

The amount charged by lenders to borrowers for the use of money, expressed as a percentage of the principal, usually on an annual basis.

Loanable Funds

The funds in financial institutions that are available for borrowing.

Higher Interest Rate

An increased percentage charged on borrowed money or paid on savings and investments.

Public Saving

Public saving refers to the surplus of government revenues over government spending. It's a component of national savings along with private savings.