Substantive Procedures

Short answer - because if you look at the syllabus, it doesn't specify substantive procedures for profit and loss items. For example: 4. The audit of specific items For each of the ACCOUNT BALANCES stated in this sub-capability: Explain the audit objectives and the audit procedures to obtain sufficient, appropriate evidence in relation to: a) Receivables: b) Inventory: etc ....

Yes there are P&L items that make up the movements between opening and closing balances e.g. Opening receivables + sales - cash receipts +/- adjustments (journals for bad debts, etc) = Closing receivables Assuming the client has controls that are operating effectively (this should be all but the smallest of clients with - in the real world so small that they do not demand a statutory audit), the auditor will perform tests of controls on sales transactions (also purchases and payroll). If the audit concludes that controls are operating effectively to ensure that only valid transactions are recorded completely and accurately, then there is "indirect evidence" that the balances that result from transactions should exist and be accurate and complete at the year end. However, ISAs don't allow auditors to obtain evidence solely from ToCs for material account balances - so there must always be substantive procedures (reduced) - see diagram on page 49 of the notes.