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Hi Mrs. Kim,
Could you just differentiate test of details and test of controls in simple terms?
And are inspection, observation ,enquiry& confirmation and recalculation & reperformance procedures only under test of controls?
Thank you very much.
Adding to this, also which test is more suitable to obtain sufficient appropriate evidence?
Thank you once again.
Your questions on your first post are answered here https://opentuition.com/topic/substantive-procedures-tests-of-controls
In answer to your second question – it depends on what evidence is needed! If you need evidence about the operating effectiveness of controls – you have to test the controls!
Generally, ISAs require that for all material balances/classes of transactions/disclosure, sufficient appropriate audit evidence cannot come from tests of controls alone – that makes sense because evidence of monetary amounts is obtained from substantive procedures.
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