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There are two broad types of audit procedure:
– tests of controls and
– substantive procedures.There are two types of substantive procedure:
– tests of details (e.g. recalculation individual invoice amounts) and
– analytical procedures (see Chapter 10).Analytical procedure is more of Ratio calculation and Substantive tests are test of weak internal control.
Correct me if I am wrong please!!
Please use the tutor forum to ask a tutor – I don’t look at the student forums every day.
Analytical procedures include analysis of ratios and trends – also so called “tests/proofs in total” (also called “reasonable tests”).
A test of details – is just that – a test of individual £ amounts. For material/high risk audit areas SOME tests of details must always be carried out – the extent will be greater/lesser depend on whether controls are effective (i.e. strong)/not effective (i.e. weak).
Tests of controls are not concerned with £ amounts – but whether the control was applied – yes or no.
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