Tests done by the auditor that are referred to as internal control tests determine whether
A)the financial statements are materially misstated
B)the balance sheet is materially misstated
C)the internal controls are the responsibility of management
D)the internal controls of the company prevent or detect misstatements in the financial statements

Question

Quizplus · Accepted Answer

The purpose of internal control tests is to determine whether the internal controls in place effectively prevent or detect misstatements in the financial statements. Therefore, option D is the best choice. Option A and B may be determined through substantive tests rather than internal control tests. Option C is a general statement but does not relate specifically to the purpose of internal control tests.

Tests Done by the Auditor That Are Referred to as Internal