Test of controls and subtantive procedures

Basically test of controls involves testing the effectiveness of the client’s internal control system. It aims at establishing how effective the controls are in preventing and detecting misstatements of items in financial statements.

Taking for instance authorization of activities as a control in an organization, the auditor will check whether the activities were properly authorised. A positive result will reduce the possibility of material misstatements of items in the financial statements.

On the other hand substantive procedures are performed in order to test whether items in the financial statements are materially misstated. For example , the auditor may do a physical check up to test whether the recorded fixed assets actually exist and that they are recorgnised at a reasonable amount .

The general distinction is that test of controls focuses on internal controls whilst substantive procedures focus on items in the financial. You can further distinguish the two facets based on the actual audit procedures to be carried out by the auditor. But I feel this is enough and hope that you will find it helpful. Good luck!!!!