A substantive test of transactions is an examination of specific transactions to determine their accuracy and completeness. Option 2) 'Account for a sequence of payroll checks' is a substantive test of transactions.
A substantive test of transactions is an examination of specific transactions to determine their accuracy and completeness. In this case, option 2) 'Account for a sequence of payroll checks' is a substantive test of transactions. This test involves verifying that each payroll check has been recorded correctly and that the total amount of the checks matches the payroll journal. By reconciling the disbursements in the payroll journal with the disbursements on the payroll bank statement (option 3), auditors can also ensure the accuracy of the recorded transactions. Option 1, reviewing personnel policies, is not a substantive test of transactions as it does not involve examining specifictransactions. Option 4, examining printouts of transactions rejected by the computer as having invalid employee IDs, is a substantive test of transaction completeness but not accuracy.