Substantive procedures

Substantive procedure – An audit procedure designed to detect material misstatements at the assertion level. Substantive procedures comprise:

(i) Tests of details (of classes of transactions, account balances, and disclosures). For example,a receivables circularisation to and verify the receivables.

(ii) Substantive analytical procedures. For example, looking at the receivables collection period from one year to the next to see if there are changes which imply that more audit work needs to be done, or if things look in line with the previous period.