Final answer:
Tests of details of balances are audit procedures designed to test for monetary errors in the financial statements, such as confirming receivable balances or counting inventory.
Step-by-step explanation:
Tests of details of balances are specific audit procedures that are intended to test for monetary errors in the financial statements. The correct answer to the student's question is option A) test for monetary errors in the financial statements. These procedures are focused on verifying the amount of transactions and balances, the existence of assets and liabilities, the completeness of information contained in the statements, rights and obligations related to assets and liabilities, and the presentation and disclosure adequacy.
For example, an auditor may confirm accounts receivable balances with customers or count inventory physically to ensure the amounts reported are accurate. These tests help to ensure that the financial statements provide a true and fair view of the company's financial position and performance.