Applying substantive tests to the details of asset and liability accounts as of an interim date,rather than as of the balance sheet date:
A)Eliminates the use of certain statistical sampling methods that would otherwise be available.
B)Presumes that the auditor will reperform the tests as of the balance sheet date.
C)Should be especially considered when there are rapidly changing economic conditions.
D)Potentially increases the risk that errors which exist at the balance sheet date will not be detected.

Question

Quizplus · Accepted Answer

Applying substantive tests to the details of asset and liability accounts as of an interim date may increase the risk that errors that exist at the balance sheet date will not be detected. This is because there is a time gap between the interim date and the balance sheet date, during which errors or changes may occur. Therefore, auditors should exercise caution when using an interim date and consider performing additional procedures closer to the balance sheet date to detect any potential errors.

Applying Substantive Tests to the Details of Asset and Liability