Final answer:
The most appropriate test of control to assess the transaction-related audit objective of posting and summarization is to observe whether the accountant reconciles the bank account. This task directly relates to the auditor's objective of ensuring transactions are correctly recorded and summarized.
Step-by-step explanation:
The question relates to the audit process and in particular, how an auditor tests controls related to the transaction-related audit objective of posting and summarization. To test this objective, the auditor is looking to confirm that transactions are recorded in the correct amount and in the proper period, and that they are summarized accurately in the financial statements. Among the options given, the best test of control for this objective is:
C) Observe whether the accountant reconciles the bank account.
Option C is a direct test of the posting and summarization process. During a bank reconciliation, the accountant reviews the entries in the company's books and matches them with the bank statements to ensure transactions are posted and summarized correctly. This test helps the auditor to assess the reliability of the process the entity uses to capture and summarize cash transactions.
The other options provided are tests of controls, but they do not directly address the audit objective of posting and summarization. Instead, they address other objectives such as occurrence, completeness, cutoff, and safeguarding of assets which are not directly relevant to this question.