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Dear sirs/ma’am,
please let me know the procedures below are test of controls or substantive test as the exercise asking me using substantive tests to ensure the balance of receivables:– Scan for any new unfamiliar customers with high volume of sales, inquiry the sales department for customers’ information (like tax code) to check the valid of the customers
Thanks in advance
If you refer to the resouces page https://opentuition.com/acca/aa you will see at the bottom links to six “key articles” – one of which is “Audit tests: the difference between tests of control and substantive tests” https://opentuition.com/acca/aa/audit-tests-difference-tests-control-substantive-tests – this has a detailed explanation of the difference,
The essential difference is summarised in this post: https://opentuition.com/topic/s-d-17
A TOC determines whether a control has operated – yes/no?
A substantive procedures provides evidence of a monetary $ amount.See at the bottom of page 71:
“* IMPORTANT note: As a test of control, enquiry must be combined with other procedures. Enquiry alone is NOT sufficient to test operating effectiveness.”
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