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Hi
1. What is Directional Testing? and do Auditors use directional testing in real life?
2. Is it examinable in AA?Thanks
It’s an audit methodology/approach that was popular 20-30 years ago – it’s not examinable so I’m not going to say more on it.
What you do need to understand for AA is the relevance of “direction OF testing” (which is not the same at all – just happens to have similar words). In simple terms this refers to testing:
A. “forwards” (e.g. from “source” to financial statements); or
B. “backwards” (e.g. from financial statements to “source”).Direction is important, for example:
A is relevant to the assertion of completeness (of recording).
B is relevant to the assertion of existence (e.g. of an asset). (See page 99 of the notes)
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