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Is cutoff of sales and purchases an internal control(tests of control)or is it an assertion to be verified by substantive procedures?
Yep it’s an assertion. .. it’s examined under sub procedures test of details of classes of transactions
Hm, IMO I think cut-off test relates more to substantive test since it tests the possibility of under/overstatement. However, as I remember, a test on a transaction sometimes called “dual-purposes” test. It means that when you test the correctness in the way a transaction was done, you may detect misstatement but also this misstatement is an indicator that control, if existed, was not so effective. Therefore, if you know that there are indeed control activities implemented to ensure the cut-off of transaction but during the cut-off test you find a misstatement then the result also suggests a failure in these control activities.
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