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hi, i’m using the BPP study text. Could someone please tell me if they use the word audit plan to mean substantive procedures? examples are on page 228- audit plan inventory, pg 243 audit plan receivables, pg 268 audit plan accts payables and accruals. thanks
Audit plan is what you do at the first stage of audit, checking the business environment, checking the areas that might be affected by risk, setting dates for audit procedures, assigning your staff to areas of audit, etc. It’s not substantive procedures, substantive procedures are procedures to check that the material areas of audit are not affected by any misstatement, due to poor internal controls or other circumstances, it’s a method for doing something through which we can find mistakes.
Definition : ” substantive audit procedure is a direct test of a financial statement balance designed to detect material misstatements at the assertion level. Substantive procedures comprise tests of details (classes of transactions, account balances, and disclosures), and substantive analytical procedures.”
To know such definitions and others in the audit syllabus, check this site, it’s very useful and has helped me a lot :Audit Terminology DictionaryNo, the audit plan is the first step of any audit. Substantive procedures are
“those activities performed by the auditor to detect material misstatement or fraud at the assertion level. The different assertions of balances are: existence, rights and obligations, validity, and accurate.”
This stuff is pretty difficult to understand because there are so many words that kind of mean the same thing. Here’s a useful guide.
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