Which one of the following statements is TRUE? In deciding on substantive tests of transactions:
A) the materiality of the item will not influence the choice of procedures used.
B) results obtained in the prior year's audit will not affect the procedures used this year.
C) some procedures are commonly employed on every audit regardless of the circumstances.
D) all procedures are dependent on the adequacy of the controls and the results of the tests of controls.

Question

Quizplus · Accepted Answer

It is true that some procedures are commonly employed on every audit regardless of the circumstances. These procedures are often referred to as "risk assessment procedures" and are used to obtain an understanding of the entity, its environment, and its internal control. However, the materiality of the item and the results of the prior year's audit may influence the choice of substantive procedures used, and the adequacy of the controls will also impact the choice of procedures.

Which One of the Following Statements Is TRUE? in Deciding