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Hi,
I copied the tests below from my book, both seems same to me. Even if the words are a bit different still the evidence that will comes out of both seems same to me. Can you explain what is the element that makes these both different from each other?
TOC of Cut-off: ” Campare dates on sales invoices with dates of corresponding shpping documentation”
Substantive test of cut-off: “For a sample of sales invoices around the year-end, inspect the dates and compare with the dates of dispatch and the dates recorded in the ledger for application of correct cut-off.”
The first one is NOT a test of control. You, the auditor, are comparing dates. You are not, for example, testing a control, such as a signature of a member of the client’s accounting department which provides evidence that that person has checked cut-off.
Incidentally, the test sould be done both ways: trace from some despatch notes close to year end to ensure there are invoices for these, and then check from some invoices close to year end to despatch notes to ensure whatever is invoiced has been despatched.
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