Which of the Following Statements Is Wrong Regarding Continuous Audit

question 20

Multiple Choice

Which of the following statements is wrong regarding continuous audit?

• A) Continuous audit is to perform audit-related activities on a continuous basis
• B) Testing in continuous audits often consists of continuous controls monitoring and continuous data assurance
• C) Technology plays a key role in continuous audit in analyzing trends and patterns of transactions, identifying exceptions and anomalies, and testing controls
• D) Continuous audit is frequently used to perform substantive tests and is used for testing of controls through transactional-data analysis

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Definitions:

Bad Debts

Debts that are not recoverable and are written off as a loss by the business because they cannot be collected.

Journal Entries

Journal entries are the recordings of financial transactions in the books of accounts, serving as the primary input in the accounting system.

Doubtful Accounts

Accounts receivable considered unlikely to be collected, prompting businesses to create allowances for bad debts.

Bad Debts Adjustment

An accounting entry made to account for invoices that are not expected to be collected due to customer default.