(Answered) Designing tests - determining objectives to achieve

When you look at designing tests you have to first look at what objectives are you're trying to achieve. For example if you look at cash in banks you know that there are two main objectives: Rights and Existence. The first refers to the right to own without restriction. There are accounts that can be pledged as collateral for a loan which would not be free and clear. Existence means that it physically exists.;As a result of this the auditor would then design procedures around the testing of the cash in bank balance with the idea of obtaining the best possible evidence. For that reason bank confirmations are an important source of information due to the fact that it is reliable third party documentation that confirms both objectives.
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Designing tests - determining objectives to achieve

 


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