Which of the following account balances are typically audited fully or substantially with limited or no controls testing?
A) Investments
B) Intercompany balances
C) Prepayments
D) All of the above

Question

Quizplus · Accepted Answer

Investments, intercompany balances, and prepayments are all high-risk areas that are typically audited fully or substantially with limited or no controls testing. This is because these accounts are often subject to manipulation or error, and the risks associated with misstatements in these accounts are generally significant. Therefore, auditors typically perform substantive procedures such as detailed testing of transactions and account balances, review of documentation, confirmation of balances, and other procedures to obtain sufficient evidence to support the account balances reported in the financial statements.

Which of the Following Account Balances Are Typically Audited Fully