Question

Which of the following is an appropriate approach to testing completeness and accuracy over internal information used in an audit?

1) Indirectly test information
2) Execute a test of one
3) Test management's controls
4) Perform analytical procedures

Answer 1

To ensure completeness and accuracy in an audit, testing management's controls and performing analytical procedures are appropriate approaches. These methods help to verify the effectiveness of internal controls and identify data inconsistencies.

Step-by-step explanation:

An appropriate approach to testing the completeness and accuracy of internal information used in an audit involves several methods, amongst which the most relevant can include testing management's controls and performing analytical procedures.

Testing management's controls help ensure that the processes responsible for data accuracy and completeness are effective. Performing analytical procedures consists of evaluating financial information through analysis of plausible relationships among both financial and non-financial data. These procedures can reveal inconsistencies or unusual patterns that may signal errors or misstatements.

Auditors must apply a critical eye while reviewing sources, much like the way one would assess a text by answering first and second questions to determine factual consistency and inferential analysis. In auditing, this equates to checking if the internal information supports or contradicts other data, and how it aligns with the controls and procedures set up by management.