Substantive tests of balances are sometimes done before the year-end.This can only be done if:
A) substantive tests have to be increased.
B) internal controls are effective.
C) more reliable evidence is needed.
D) none of the above

Question

Quizplus · Accepted Answer

Substantive tests of balances are done to obtain evidence about the fairness of the account balances. These tests can be done before the year-end if internal controls are effective and if there is confidence in the accuracy of the account balances, so that further testing is not needed at year-end. This allows auditors to complete their work earlier and avoid a time crunch at year-end.

Substantive Tests of Balances Are Sometimes Done Before the Year-End