A dual-purpose test:
A)simultaneously tests debits and credits.
B)is a procedure completed by both the internal and external auditors.
C)is useful to both the entity and the auditor.
D)is both a substantive test of transactions and a test of controls.

Question

Quizplus · Accepted Answer

A dual-purpose test serves two purposes: it is both a substantive test of transactions and a test of controls. This test is useful to both the entity and the auditor as it tests the accuracy and completeness of transactions and serves as an efficient method of testing controls. It is usually performed by the auditors during their testing procedures. Therefore, option D is the correct choice. Option A is incorrect because a dual-purpose test does not simultaneously test debits and credits; it tests both of them together. Option B is incorrect because the dual-purpose test is usually completed by the external auditors for testing purposes, and internal auditors may or may not participate. Option C is partially correct because it is useful to both entities and auditors, but that alone does not encompass the entire purpose of a dual-purpose test.

A Dual-Purpose Test