After the auditor has completed the substantive tests of balances for the inventory process,he or she determines
A)whether the balance sheet accounts in the inventory process are prepared in accordance with the applicable financial reporting framework
B)whether the income statement accounts in the inventory process are prepared in accordance with the applicable financial reporting framework
C)whether the balance sheet accounts in the inventory process are audited in accordance with the applicable financial reporting framework
D)whether the income statement accounts in the inventory process are audited in accordance with the applicable financial reporting framework

Question

Quizplus · Accepted Answer

After completing substantive tests of balances for the inventory process, the auditor's primary objective is to determine whether the financial statements are presented fairly in accordance with the applicable financial reporting framework. The balance sheet accounts in the inventory process are part of the financial statements and thus, the auditor would need to determine whether they are prepared in accordance with the applicable framework. The income statement accounts are not part of the balance sheet accounts and, therefore, are not the primary focus of the substantive testing of balances for the inventory process.

After the Auditor Has Completed the Substantive Tests of Balances