You are performing the audit of Jenkins and Company. Your tests of controls and tests of transactions for accounts payable demonstrate that the controls are operating effectively. This would normally allow you to
A) eliminate the need for substantive testing of balances for accounts payable.
B) reduce the need for substantive testing of balances for accounts payable.
C) reduce control tests in other transactions cycles.
D) increase the need for substantive testing of balances for accounts payable.

Question

Quizplus · Accepted Answer

Effective internal controls for accounts payable would reduce the risk of material misstatement in the account, therefore reducing the need for substantive testing of balances. However, there may still be a need for some level of substantive testing to ensure the accuracy and completeness of the balances.

You Are Performing the Audit of Jenkins and Company