Question
In class, we discussed the notion of an audit philosophy of tests of accounts for overstatement and understatement to gain audit efficiencies.Consider the following statements:
In class, we discussed the notion of an audit philosophy of
tests of accounts for overstatement and understatement to
gain audit efficiencies.Consider the following statements:
I.Testing Sales for UNDERstatement, conceptually, also tests Accounts receivable for UNDERstatement.
II. Assume that company management made the following journal
entry:Capital Asset (i.e. Building)XX
Repairs and Maintenance ExpenseXX
If the auditor tests the asset account for Overstatement, then
conceptually: Expenses are also tested for Overstatement.
a.I is true;II is true.
b.I is true;II is false.
c.I is false; II is true.
d.I is false; II is false.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started