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Final acceptable levels of detection risk have been determined for several assertions. The auditor is prepared to proceed with designing specific substantive tests.
Required
a. What is the purpose of substantive tests?
b. What factors pertaining to substantive tests can be varied to accommodate different acceptable levels of detection risks? Explain how each factor is varied to accommodate a low versus a high acceptable level of detection risk.
c. Indicate the six types of substantive tests and the relative effectiveness and cost of each.
Because of America's large budget deficits, the government is borrowing much from foreign countries. There are experts who believe, it is not economically wise for foreigners to hold so much of U.S assets.
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