Question

Which of the following is a general audit test?

A. Fee assessment procedures.
B. Tests of controls.
C. Preparation of corporate tax returns.
D. Active testing procedures.

Answer 1

The correct answer is B. Tests of controls. General audit tests are procedures used by auditors to gather evidence and evaluate the effectiveness of a company's internal controls.

Step-by-step explanation:

The correct answer is B. Tests of controls.

General audit tests are procedures used by auditors to gather evidence and evaluate the effectiveness of a company's internal controls. These tests help auditors determine whether the financial statements are fairly presented and provide reasonable assurance that the company's assets are safeguarded. Tests of controls specifically focus on evaluating the design and operating effectiveness of internal controls, such as segregation of duties and authorization procedures.

For example, an auditor may perform a test of control by reviewing the company's segregation of duties policy and then select a sample of transactions to analyze if the policy is being followed. This would involve reviewing documentation, such as approval signatures and other supporting evidence, to determine if the controls are functioning as intended.