Which of the following audit tests would be regarded as a test of controls?
A) Tests comparing inventory pricing to vendors' invoices.
B) Tests of the specific items making up the balance in a given general ledger account.
C) Tests of the additions to property, plant and equipment by physical inspections.
D) Tests of the signatures on purchase orders to a list of approved signatories.

Question

Quizplus · Accepted Answer

Tests of controls are designed to test the effectiveness of the client's internal controls, such as the adequacy of authorizations for transactions. Therefore, tests of the signatures on purchase orders to a list of approved signatories is a test of controls. The other options are substantive tests that aim to obtain evidence about the correctness or completeness of the accounts or transactions, not the effectiveness of internal controls.

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