Auditing: A Risk Based-Approach to Conducting a Quality Audit
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
Question
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Chapter 8, Problem 1TFQ
To determine

Introduction:Test of Control refers to the audit procedures in order to establish the effectiveness of the controls used by the client in order to prevent any material misstatement or fraud.

To state:To confirm whether the statement is true or false.

Expert Solution & Answer
Check Mark

Answer to Problem 1TFQ

The statement is true

Explanation of Solution

Basic Audit procedures are done through enquiry and observation while Analytical procedures are done in Audit Sampling. A Sample of the transactions is taken in order to test the controls and account balances with the conclusion that by sample transactions it is tried to check and conclude that the transactions done during the audit period represent the status of the population of transactions. Sampling is a tool where the prudence of the auditor is used to see that how skillfully he uses the samples to decide about the status of the account balances and related transactions.

Hence, the statement is True.

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