Which of the following audit tests would be regarded as a test of controls?
A)Comparison of the inventory pricing to vendors' invoices
B)Tests of the signatures on canceled checks to board of directors' authorizations
C)Tests of the additions to property, plant, and equipment by physical inspections
D)Review of the specific items making up the balance in a given general ledger account

Question

Quizplus · Accepted Answer

Tests of signatures on canceled checks to board of directors' authorizations are tests of controls because they are checking whether the proper authorization and approval procedures were followed before checks were issued and signed. The other options listed are substantive tests, which are used to verify the accuracy of the financial statements.

Which of the Following Audit Tests Would Be Regarded as a Test