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Hi,
I think, I have mainly understood the difference between the 3 audit procedures, however it is not really clear to me the relationship between them or at least I have an understanding but I would like to know if it is correct.
An auditor has to perform all of them, however if the tests of controls provide the auditor with the assurance that internal controls are operating effectively, can the level of sampling related to tests of details be lower than if this assurance was not provided?
What about the analytical procedures, is the extension of those procedures depending also on the outcome of the tests of controls?Thank you
Best Regards,Salvatore
There are two classes of audit test: testill of control and substantive tests.
Substantive tests consist of analytical procedures and tests of detail (note that analytical procedures cannot be used to test controls).
If the internal controls are found to be working well then substantive tests can be reduced.
HTH
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