Which of the following audit tests would be regarded as a test of controls?
A) comparison of the inventory pricing to vendors' invoices
B) tests of the signatures on canceled checks to board of directors' authorizations
C) tests of the additions to property, plant, and equipment by physical inspections
D) review of the specific items making up the balance in a given general ledger account

Question

Quizplus · Accepted Answer

Tests of signatures on canceled checks to board of directors' authorizations are a test of controls because they are verifying that the proper authorization and approval procedures were followed in relation to the recorded transaction. The other options are substantive tests, as they are focused on verifying the accuracy and completeness of recorded amounts rather than testing controls over the recording process.

Which of the Following Audit Tests Would Be Regarded as a Test