Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 16, Problem 1RQ
To determine
Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.
Expert Solution & Answer
Explanation of Solution
Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:
- Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
- Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the
audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset
The test of control and substantive test of transaction results affects the
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Students have asked these similar questions
Distinguish among tests of details of balances, tests of controls,and substantive tests of transactions for the sales and collection cycle. Explain how thetests of controls and substantive tests of transactions affect the tests of details of balances.
Explain how management assertions, general balance-relatedaudit objectives, and specific balance-related audit objectives are developed for anaccount balance such as accounts receivable.
Indicate a specific audit procedure under each of the following categories, as applied particularly in the sales and collection cycle.a. test of controlb. substantive test of transactionsc. substantive test of account balances
Chapter 16 Solutions
Auditing And Assurance Services
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Prob. 3RQCh. 16 - Prob. 4RQCh. 16 - Explain why you agree or disagree with the...Ch. 16 - Prob. 6RQCh. 16 - Prob. 7RQCh. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 10RQ
Ch. 16 - Prob. 11RQCh. 16 - Under what circumstances is it acceptable to...Ch. 16 - Prob. 13RQCh. 16 - Prob. 14RQCh. 16 - Prob. 15RQCh. 16 - Prob. 16RQCh. 16 - Prob. 17RQCh. 16 - Prob. 18RQCh. 16 - Prob. 19RQCh. 16 - Prob. 20.1MCQCh. 16 - Prob. 20.2MCQCh. 16 - Prob. 20.3MCQCh. 16 - The following questions deal with confirmation of...Ch. 16 - Prob. 21.2MCQCh. 16 - Prob. 21.3MCQCh. 16 - Prob. 22.1MCQCh. 16 - Prob. 22.2MCQCh. 16 - Prob. 22.3MCQCh. 16 - Prob. 23.1MCQCh. 16 - Which of the following is least likely to be a...Ch. 16 - The following questions concern auditor...Ch. 16 - Prob. 24DQPCh. 16 - Prob. 25DQPCh. 16 - Prob. 26DQPCh. 16 - The following misstatements are sometimes found in...Ch. 16 - Prob. 28DQPCh. 16 - Prob. 29DQPCh. 16 - Prob. 30DQPCh. 16 - Prob. 31DQPCh. 16 - Prob. 32DQPCh. 16 - Prob. 33DQPCh. 16 - Prob. 34DQPCh. 16 - Prob. 35DQPCh. 16 - Prob. 36DQPCh. 16 - Prob. 38DQPCh. 16 - Prob. 39ICA
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Similar questions
- Describe the steps that auditors use to test controls over sales and collections. Please provide references if any.arrow_forwardWhat is the purpose of analytical reviews in the audit of revenue cycle accounts? Please give an example.arrow_forwardWhich assertion is most likely being tested when an auditor vouches transactions from the sales Journal to the sales orders? a. cutoff b. rights c. completeness d. accuracyarrow_forward
- What tools do auditors use to verify the ending balances in the various accounts in the acquisition and payments cycle? Please provide reference(s).arrow_forwardWhat is the audited net sales balance?arrow_forwardWhat are the goals of dual-direction testing regarding an audit of the accounts receivable andcash collection system?arrow_forward
- 1. Explain the basic processes involved in documenting revenue transactions as a part of the audit on sales. 2.arrow_forwardWhat types of audit procedures are typically performed in testing operating effectiveness of controls over the revenue and collection cycle?arrow_forwardList the transaction-related audit objectives for the audit of salestransactions. For each objective, state one internal control that the client can use toreduce the likelihood of misstatementsarrow_forward
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