When Auditors Conclude That an Internal Control Is Effective,they Will

question 20

True/False

When auditors conclude that an internal control is effective,they will rely on the control to prevent and detect a material misstatement and reduce their detailed substantive procedures.

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Definitions:

Bad Debts

Accounts receivable that a company determines it will not be able to collect.

Unadjusted Trial Balance

A financial report showing all accounts and their balances before adjustments, serving as a check on the correctness of the sums of debit and credit balances.

Aging of Accounts Receivable

A document or method that organizes a business's accounts receivable based on the duration an invoice has remained unpaid.

Bad Debts Expense

An expense reported on the income statement, representing the non-collectable accounts receivable from extending credit to customers.