Final answer:
In the context of auditing cash receipts, auditors apply the same methodology to design tests of controls and substantive tests as for sales, and these tests depend on the controls identified. Experimental controls are crucial in experiments for valid comparisons between groups with only one different independent variable. Option b.
Step-by-step explanation:
When designing tests of controls and substantive tests of transactions for cash receipts, it is important to remember that auditors use the same methodology option b for designing tests of controls and substantive tests of transactions for cash receipts as they use for sales. The tests of controls are not designed to test for monetary misstatements; rather they are aimed at assessing the operational effectiveness of the control systems in place. Moreover, the tests of controls are certainly dependent on the controls the auditor identifies, which means they must evaluate which controls are implemented by the company and whether they are functioning as intended.
The statement that tests of controls are not dependent on whether the company being audited is publicly traded is correct. The design and implementation of controls are based on the company's processes and the auditor's assessment of risks, not on the company's public or private status.
To clarify the role of experimental controls, as referenced in the given information: experimental controls are important because they allow an experimenter to compare groups that are different in only one independent variable. This comparison helps in establishing causality and ensuring the validity of the experimental results.