A Dual-Purpose Test

question 31

Multiple Choice

A dual-purpose test

• A) Simultaneously tests debits and credits.
• B) Is a procedure completed by both the internal and external auditors.
• C) Is useful to both the entity and the auditor.
• D) Is both a substantive test of transactions and a test of controls.

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Definitions:

Private Value

The value of a good or service to an individual rather than to society as a whole or to the market.

Externality

A cost or benefit arising from an activity or transaction that affects an unrelated third party who did not choose to incur that cost or benefit.

Command-And-Control Policies

Governmental regulations that directly mandate specific practices or limit activities in order to achieve policy outcomes, such as environmental standards.

Market-Based Policies

Economic strategies that utilize market principles and forces to address and solve problems, often with the goal of improving efficiency and outcomes.