Substantive Analytical Procedures

question 77

Multiple Choice

Substantive analytical procedures:

• A) can replace audit testing of balances.
• B) can replace audit testing of transactions.
• C) can augment audit testing if the ICFR is accurate.
• D) None of the above.

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Definitions:

Capital Balance

Capital balance represents the amount of money that stakeholders have invested in a company. This can also refer to the amount of equity a company has.

Replacement Cost

The cost to replace an asset with another of similar function and quality in current market conditions.

Inventory

Items held for sale in the ordinary course of business, or supplies and raw materials that are used in production.

Partnership

A business structure where two or more individuals share ownership, profits, and liabilities.