Analytical audit procedure and Principal audit procedure

The relevant learning outcome is:
“Identify and describe audit procedures (including substantive procedures and tests of controls) to obtain sufficient, appropriate audit evidence from identified sources to support the financial statement assertions and disclosures.”
In AAA the exam asks for “principal” meaning main/most important – as you will see these requirements are not for a lot of marks – so the examiner does not want a rote-learnt list of all possible audit procedures but those that are most relevant to the issue at hand. For example, if there is significant risk of impairment, procedures should be focused on aspects of valuation.

For obtaining evidence – there are two types of audit procedure:
Test of controls – these provide indirect evidence about the accuracy/completeness etc of transactions (and hence balances) because they are just that – a test of control – was the control applied – yes or no? This is less relevant to AAA than to AA since the requirement will often specify substantive.

Substantive procedures (which include substantive analytical procedures and tests of details) provide direct evidence about the accuracy/completeness etc of transactions and balances because they are concerned with monetary amounts.

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