Question

Which of the following audit tests would be regarded as a test of control?

A. Tests of the specific items making up the balance in a given general ledger account.
B. Tests confirming receivables.
C. Tests of the signatures on canceled checks to board of director's authorizations.
D. Tests of the additions to property, plant, and equipment by physical inspection

Answer 1

A test of control in auditing is meant to assess the efficiency and effectiveness of a company's internal controls. In this instance, testing the signatures on canceled checks against board of director authorizations is an example of such a test, as it verifies the proper authorization of transactions.

Step-by-step explanation:

The audit test that would be regarded as a test of control is C. Tests of the signatures on canceled checks to board of director's authorizations. This type of test specifically assesses the effectiveness of the organization's internal controls over the disbursement process by verifying whether payments made were duly authorized, which is a key control activity in preventing unauthorized transactions. Tests of controls are procedures to assess the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the assertion level.