Diane Smith, CPA, performed tests of controls and substantivetests of transactions for sales for the month of March in an audit of the financialstatements for the year ended December 31, 2013. Based on the excellent results of boththe tests of controls and the substantive tests of transactions, she decided to significantlyreduce her substantive tests of details of balances at year-end. Evaluate this decision.
Diane Smith, CPA, performed tests of controls and substantivetests of transactions for sales for the month of March in an audit of the financialstatements for the year ended December 31, 2013. Based on the excellent results of boththe tests of controls and the substantive tests of transactions, she decided to significantlyreduce her substantive tests of details of balances at year-end. Evaluate this decision.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Diane Smith, CPA, performed tests of controls and substantive
tests of transactions for sales for the month of March in an audit of the financial
statements for the year ended December 31, 2013. Based on the excellent results of both
the tests of controls and the substantive tests of transactions, she decided to significantly
reduce her substantive tests of details of balances at year-end. Evaluate this decision.
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