Question

Which of the following test(s) of details of transactions can be used as a dual-purpose test in conjunction with tests of controls?

1) Test a sample of purchase requisitions for proper authorization.
2) Obtain selected vendors' statements and reconcile to vendor accounts.
3) Obtain listing of accounts payable and compare total to general ledger.
4) Review results of confirmations of selected accounts payable.

Answer 1

The test of details of transactions that can be used as a dual-purpose test in conjunction with tests of controls is option 2) Obtain selected vendors' statements and reconcile to vendor accounts.

Step-by-step explanation:

The test of details of transactions that can be used as a dual-purpose test in conjunction with tests of controls is option 2) Obtain selected vendors' statements and reconcile to vendor accounts.

This test serves as a dual-purpose test because it not only provides information about the accuracy and completeness of transactions (a test of details of transactions), but it also provides evidence about the effectiveness of controls over vendor accounts (a test of controls).

For example, when obtaining selected vendors' statements and reconciling them to vendor accounts, any discrepancies or errors can be identified, which would indicate weaknesses in the control procedures. Additionally, this test can also provide evidence of accuracy and completeness of transactions by confirming that the vendor statements reconcile with the vendor accounts in the general ledger.