Test Check

Question 1

Meaning of test check

Answer 1

Test checking is the an auditing technique where the auditor examine only a sample of transactions or records instead of checking all transactions. Thus method is used to evaluate the accuracy and reliability of financial records and internal controls

Question 2

Advantages of Test Checking

Answer 2

1. Time Efficiency
2. Cost-Effective
3. Practicality
4. Focus on Material Items
5. Evaluation of Internal Controls
6. Reduced Disruption
7. Statistical Reliability

Question 3

Disadvantages of Test Checking

Answer 3

1. Risk of Sampling Error
2. Non-Representative Samples
3. Limited Scope
4. Over-Reliance on Internal Controls
5. Subjectivity in Sampling Selection
6. Inadequate for Small Population
7. Potential for Fraud
8. Legal and Regulatory Risks