When designing audit procedures, the direction of tests is a crucial step in satisfying the:
A) classification objective.
B) valuation objective.
C) cutoff objective.
D) completeness objective.

Question

Quizplus · Accepted Answer

The direction of tests refers to whether the audit procedures are designed to test for completeness vs. existence. The completeness objective is concerned with ensuring that all transactions and balances that should be recorded by the company are included in the financial statements. Therefore, choosing the direction of tests that addresses completeness will help satisfy this objective.

When Designing Audit Procedures, the Direction of Tests Is a Crucial