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If you are testing the arithmetical accuracy of exchange rates is this an analytical procedure or test of detail? Similary if you are re-doing a bank rec or cross casting something – which category do these fall into?
Thanks
It depends what you are doing the test for.
If you are looking at exchange rates to ensure payments correspond to specific invoices, that would be a test of detail. If you are looking at exchange rates to test the reasonableness of a year’s purchases from overseas, then you are doing an analytical procedure.
Redoing a bank rec and cross casting is a test of detail (and might be a test of control to make sure the bank rec is carried out correctly).
Thanks – does that mean that all tests must fall into either analytical procedures or tests of detail at the substantive level? If you were to make management enquiries at the substantive level would this also be tests of detail or does it depend on what you’re asking them?
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