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Which of the following provides the MOST reliable audit evidence on the validity of transactions in a financial application?
Suggested Answer: B
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Substantive testing provides the most reliable audit evidence on the validity of transactions in a financial application. Substantive testing is an audit procedure that examines the financial statements and supporting documentation to see if they contain errors or misstatements. Substantive testing can help to verify that the transactions recorded in the financial applicationare authorized, complete, accurate, and properly classified. Substantive testing can include methods such as vouching, confirmation, analytical procedures, or physical examination.
24 comments · newest first
RO
Rosio
2 days ago
Exactly! We need real evidence, not just documentation.
MA
Marvel
7 days ago
D) Design documentation reviews are too theoretical.
RA
Rana
12 days ago
C) Compliance testing is important, but it focuses on rules, not validity.
CO
Cordelia
17 days ago
True, but they don't verify the actual transactions like substantive testing does.
JU
Justine
23 days ago
A) Walk-through reviews are helpful too, but not as strong.
SH
Shawnda
28 days ago
Agreed! It provides concrete evidence.
RO
Rosio
1 month ago
I think B) Substantive testing is the best choice. It directly checks the transactions.
IS
Isreal
1 month ago
Yes, I feel confident about choosing B.
LI
Linwood
1 month ago
Exactly! B really stands out for reliability.
BE
Beckie
2 months ago
D is more about design, not transaction validity.
RO
Ronnie
2 months ago
C is useful for compliance, but not for validity.
TO
Toi
2 months ago
But they don’t provide as much direct evidence as B.
LU
Lucia
2 months ago
A is good too. Walk-through reviews help understand processes.
IS
Isreal
2 months ago
I agree, B is strong. It checks actual transactions.
LI
Linwood
2 months ago
I think B is the best choice. Substantive testing gives direct evidence.
AR
Arthur
3 months ago
Not sure about that, I feel like they all have their place.
SH
Sherell
3 months ago
Wait, are we really saying design docs are less reliable?
RE
Rebbeca
3 months ago
Compliance testing is often overlooked but still important.
DE
Derrick
3 months ago
Walk-through reviews can be helpful too, though.
VI
Vinnie
3 months ago
I think substantive testing is the way to go!
LE
Lea
4 months ago
I'm torn between compliance testing and substantive testing; I just can't recall which one is more reliable for validating transactions.
FE
Fernanda
5 months ago
I feel like walk-through reviews are important, but they might not provide as much evidence as substantive testing.
JE
Jerilyn
5 months ago
I remember practicing a question similar to this, and I think compliance testing was considered less reliable than substantive testing.
AL
Alaine
5 months ago
I think substantive testing might be the best choice since it directly examines the transactions, but I'm not entirely sure.