In performing tests of details of balances, the auditor would obtain the bank statement directly from the bank, prepare the bank reconciliation, and verify all reconciling items and mathematical accuracy if detection risk was:
A) very high.
B) high.
C) moderate.
D) low.
E) very low.

Question

Quizplus · Accepted Answer

When detection risk is very low, the auditor performs more extensive and thorough testing procedures to minimize the risk that they might not detect material misstatements. Obtaining the bank statement directly from the bank, preparing the bank reconciliation, and verifying all reconciling items and mathematical accuracy are examples of such extensive procedures.

In Performing Tests of Details of Balances, the Auditor Would