Walk through test/ Test of controls

A walk through test is used to verify understanding of the accounting system. The accounting system will have been recorded by notes or flowchart. A single transaction, for example, a sales order, is traced through all the stages: receipt, approval, goods picking, goods despatch, invoicing, Dr Receivables, receive cash. Where documents are filed, checked approved etc are compared to the notes/flowchart.

Tests of controls will look at a number of incidents of each control being applied. For example, if when orders are received a credit check is supposed to be carried out and the order stamped “Approved|”, then the auditor might observe this happening 10 times and then select 20 orders at random from the completed orders file and ensure that they have all been properly stamped and approved.