Which of the following procedures is considered a test of controls?
A)An auditor reviews the entity's check register for unrecorded liabilities.
B)An auditor evaluates whether a general journal entry was recorded at the proper amount.
C)An auditor interviews and observes appropriate personnel to determine segregation of duties.
D)An auditor reviews the audit workpapers to ensure proper sign-off.

Question

Quizplus · Accepted Answer

Testing segregation of duties involves evaluating the control environment and the procedures in place to mitigate the risk of fraud or error. This is a test of controls as it assesses whether the control procedures are effective. The other choices are substantive procedures as they focus on the accuracy of transactions and account balances.

Which of the Following Procedures Is Considered a Test of Controls