The tests of details of balances procedure which requires the auditor to review transactions near the balance sheet date for the proper period satisfies the audit objective of:
A) existence.
B) cutoff.
C) classification.
D) completeness.

Question

Quizplus · Accepted Answer

The tests of details of balances procedure which requires the auditor to review transactions near the balance sheet date for the proper period satisfies the audit objective of cutoff. Cutoff refers to the proper recording of transactions in the correct accounting period. By reviewing transactions near the balance sheet date, the auditor can ensure that transactions are recorded in the correct period and therefore satisfies the cutoff objective. This procedure, however, does not directly satisfy the other objectives of existence, classification, or completeness.

The Tests of Details of Balances Procedure Which Requires the Auditor