The auditor may perform substantive tests of transactions for revenue as part of the audit of the internal controls.The auditor does this by:
A)testing controls that have a monetary value
B)using dual-purpose tests
C)using tests on how revenue is recorded in the system
D)selecting a sample of balances and performing tests on them

Question

Quizplus · Accepted Answer

Dual-purpose tests involve testing both the effectiveness of internal controls as well as the accuracy and completeness of transactions. By performing substantive tests of transactions for revenue using dual-purpose tests, the auditor can gather evidence for both the audit of internal controls and the audit of financial statements. This approach is more efficient and effective than performing separate tests for each audit objective.

The Auditor May Perform Substantive Tests of Transactions for Revenue