The purpose of substantive tests of transactions is to determine whether:
A) the account balances are accurate.
B) there are monetary errors or irregularities in the transactions.
C) the internal control system is working.
D) the transactions this year are reasonable compared to prior years.

Question

Quizplus · Accepted Answer

Substantive tests of transactions are performed to detect monetary errors or irregularities in the transactions. This includes verifying whether transactions are properly recorded, accurately classified, and accurately processed in the accounting system. The other options listed (accurate account balances, functioning internal controls, and reasonableness of current year transactions compared to prior years) are not the primary focus of substantive tests of transactions.

The Purpose of Substantive Tests of Transactions Is to Determine