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- This topic has 3 replies, 3 voices, and was last updated 7 years ago by njivan28.
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- October 29, 2015 at 11:03 am #279511
Dear Gromit,
Hello!
We know for testing, there are two tests: analytical procedure and substantive procedures.
However, when the substantive procedure has been performed as an analytical test in nature, it will be called substantive analytical procedure.
Based on this, I have following questions:
1. As substantive analytical procedure is similar as analytical procedure, will this be a duplicate work for auditors (is it useless?)? I know analytical procedure should always be performed at the initialisation of audit, interim and other stages if it is necessary.
2. Should I assume that restricted substantive procedure is the substantive analytical procedure and the full substantive procedure is the test of detail?
3. In the practice, is there any occasion in which auditors performs substantive analytical procedures and the test of detail upon different assertions, if necessary (I mean the combination of these two procedures in one audit project rather than changing as a whole)?
Thanks a lot!
October 29, 2015 at 11:50 am #279516> We know for testing, there are two tests: analytical procedure and substantive procedures.
This is not right. The two types of test are tests of control and substantive tests. Analytical procedures are a type of substantive test, sometimes called substantive analytical procedures.
Q1 Analytical procedures are used at the planning state to identify risk areas that need hte auditor’s attention. If a ratio or comparative has moved a lot, then the analytical procedure will give little evidence that the figures are right. Rather the analytical procedures have imdicated that the figures are a bit odd. Other substantive procedures will be needed to support the figure.
Q2 No. Restricted just meand less substantive procedures and there will still be some tests of detail – though less.
Q3 This would normally be the case. For example, analytical procedures will say ittle about ownership of an asset. To establish that you would need to inspect some sort of ownership register or document.
October 29, 2015 at 4:06 pm #279541@Gromit said:
> We know for testing, there are two tests: analytical procedure and substantive procedures.This is not right. The two types of test are tests of control and substantive tests. Analytical procedures are a type of substantive test, sometimes called substantive analytical procedures.
Q1 Analytical procedures are used at the planning state to identify risk areas that need hte auditor’s attention. If a ratio or comparative has moved a lot, then the analytical procedure will give little evidence that the figures are right. Rather the analytical procedures have imdicated that the figures are a bit odd. Other substantive procedures will be needed to support the figure.
Q2 No. Restricted just meand less substantive procedures and there will still be some tests of detail – though less.
Q3 This would normally be the case. For example, analytical procedures will say ittle about ownership of an asset. To establish that you would need to inspect some sort of ownership register or document.
Many thanks Gromit! You are so nice!
Have a nice day!
September 26, 2017 at 3:18 am #408645Thank you Gromit.
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