What best describes a Test of Details?

What best describes a Test of Details?

• A. A type of audit evidence gathering focused on overall trends
• B. An evaluation of internal control design
• C. Substantive tests that concentrate on the details of items contained in the account balance and disclosure
• D. A form of analytical procedure only used for large accounts

Answer: (C)

Tests of details are substantive procedures that obtain evidence about the accuracy of account balances and disclosures by examining the actual items that make up those balances. Instead of looking at the big picture or trends, you verify the details—such as confirmations of receivables, inspecting supporting invoices, counting inventory, or recalculating depreciation—to confirm that each amount and disclosure is correct and supported by documentation. This approach provides direct, item-by-item evidence about the numbers in the financial statements, which is essential for high-risk or material accounts where precise accuracy is crucial. It differs from evaluating internal control design, which focuses on how well controls are structured to prevent or detect errors, and from analytical procedures, which examine relationships and trends across data rather than specific details of each balance.

Tests of details are substantive procedures that obtain evidence about the accuracy of account balances and disclosures by examining the actual items that make up those balances. Instead of looking at the big picture or trends, you verify the details—such as confirmations of receivables, inspecting supporting invoices, counting inventory, or recalculating depreciation—to confirm that each amount and disclosure is correct and supported by documentation.

This approach provides direct, item-by-item evidence about the numbers in the financial statements, which is essential for high-risk or material accounts where precise accuracy is crucial. It differs from evaluating internal control design, which focuses on how well controls are structured to prevent or detect errors, and from analytical procedures, which examine relationships and trends across data rather than specific details of each balance.