The purpose of tests of controls is to provide reasonable assurance that the:
A) entity has complied with disclosure requirements of generally accepted accounting principles.
B) accounting treatment of transactions and balances is valid and proper.
C) entity has complied with requirements of quality control.
D) accounting control procedures are operating effectively.

Question

Quizplus · Accepted Answer

Tests of controls are used to determine whether accounting control procedures are operating effectively. This includes assessing whether the controls are designed properly and are being applied consistently, and provides assurance that the procedures in place are reliable and effective in detecting and preventing errors or fraud. Tests of controls do not directly address compliance with disclosure requirements or quality control requirements. While testing the effectiveness of controls does indirectly contribute to the validity and propriety of accounting treatments, that is not the primary purpose of these tests.

The Purpose of Tests of Controls Is to Provide Reasonable