Which statements relating to substantive test of transaction

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Problem 1: Which of the following statements relating to substantive test of transactions, compared to substantive test of balances, is most correct?

A. Substantive test of transactions is essentially the same as substantive tests of balances when the auditor is focused on the Income Statement.

B. Substantive test of transactions is usually a more effective audit approach than substantive test of balances to address detection risk for accuracy, valuation and allocation for non-current assets.

Problem 2: Which of the following statements relating to the use of external confirmations as a substantive procedure is most correct?

C. Accounts receivable confirmations provide strong evidence of the accuracy, valuation and allocation of accounts receivable.

D. When conducting confirmations, the auditor should test the validity of the addresses to which confirmation requests are to be sent.

Reference no: EM132687245

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