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Am abit confuse on the test of control, substantive procedures and substantive analytical procedure , could someone can explain to me.
Thanks
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hye this is wali, first time attempting this paper. so i m not sure whther my explantion will b exceptable, but i m trying….
Test of control
as per my concern, it is a part of the planning and risk assessment stage,which will help u to understand the control structure of ur client within the org. as well as facilitate the auditor to plan his audit deliberately.
substantive procedure
this is two part test whr the action plan will b decided in planning stage. they r analytical test which is used to compare ur clients financial/non financial info with the std.this std. traditionally through ratios. this std. may b clients prevous years figures/ budgeted f/s or with the industry avg. etc. the main intention is to trace any unusual fluctuation. this test will decide u the volume of audit work that u will have to carry in test of details sec which is the 2nd part of substantive testtest of details
this includes, observation, inspection, inquiry.recalculation, reperformence etc which r part of ur detailed audit operationTest of controls
These are tests carried out by the auditor to confirm their operating effectiveness in an organisation. The auditor may want to rely on the controls when carrying out the audit. The auditor will evaluate the design, implementation and operating effectiveness in the year.Substantive Test.
These are tests performed by the auditor to detect material misstatement in the financial statement.Two types of substantive tests.
1. Analytical procedures.
2. Test of detail.
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