[elprezidente07]

Which of the following best describes the reason an auditor performs a walkthrough of transactions from inception through financial statement presentation?

1. To ensure that the single transaction type involved in a walkthrough is properly recorded in the general ledger

2. To determine if a necessary control is missing or ineffective

3. To determine the different types of significant transactions handled by the process

Answer is 2 & 3. In my experience, 1. is correct as well… while you test walkthroughs you ensure that the example transaction is carried from document to GL. Why isn’t #1 included? Just looking for some additional opinions on the matter.

AUD // F x2 P 92- (Test server crashed! It really does happen!)
REG // F, F, F, P - 75 Aug 2014
BEC // P - 80
FAR // F, F...now its time for my greatest trick yet.
Ethics // Very.

75 to stay alive

[Anonymous]

Walkthroughs are used as tests of controls and not substantive tests. #1 seems to be more focused on the transaction cycle.

[MommyBear]

Walkthroughs are done to understand the process and test controls. They don't look at the general ledger very much during walkthroughs. Cuttoff testing, tracing, etc test how/when things are booked to the general ledger.

[Anonymous]

Walkthroughs are all encompassing and include:

Inquiry

Observation

Inspection

[MommyBear]

So then #1 should be included and the answer in his test bank is wrong?

[elprezidente07]

I realize that walkthroughs aren't substantive tests. But, if I'm going through the entire process to see how a revenue is received, wouldn't I double check the GL to make sure that specific amount is included in the day's deposits?

AUD // F x2 P 92- (Test server crashed! It really does happen!)
REG // F, F, F, P - 75 Aug 2014
BEC // P - 80
FAR // F, F...now its time for my greatest trick yet.
Ethics // Very.

75 to stay alive

[Ima_Audit_You]

I would say #1 is incorrect because walkthroughs are meant to gain an understanding of controls, not as substantive test of transactions.

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[mw798]

@elprezidente07 because you would TRACE a transaction through to the G/L, not perform a walkthrough. Hopefully this clarifies it for you.

[Author]

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