In the sales and collection cycle, the results of the tests of controls determine:
A) whether positive or negative confirmations should be used for this engagement.
B) if tests of details of balances need to be performed.
C) the extent to which planned detection risk is satisfied for each accounts receivable objective.
D) whether assessed control risk for sales and cash receipts needs to be revised.

Question

Quizplus · Accepted Answer

The results of the tests of controls in the sales and collection cycle help determine if the assessed control risk for sales and cash receipts needs to be revised, which in turn affects the nature, timing, and extent of substantive testing.

In the Sales and Collection Cycle, the Results of the Tests