Directional testing involves testing transactions or balances for which type of error?
A)Overstatement.
B)Understatement.
C)Either overstatement or understatement.
D)Neither overstatement nor understatement.

Question

Quizplus · Accepted Answer

Directional testing involves testing for either overstatement or understatement errors. This is because the testing involves selecting transactions or balances that have a high likelihood of containing errors that could result in either overstatement or understatement of the financial statements. Therefore, the answer is C, either overstatement or understatement.

Directional Testing Involves Testing Transactions or Balances for Which Type