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Substantive procedures (or substantive tests) are those activities performed by the auditor to detect material misstatement at the assertion level. [1]Management implicitly assert that account balances and disclosures and underlying classes of transactions do not contain any material misstatements: in other words, that they are materially complete, valid and accurate.
Analytical procedures include comparison of financial information (data in financial statement) with prior periods, budgets, forecasts, similar industries and so on. It also includes consideration of predictable relationships, such as gross profit to sales, payroll costs to employees, and financial information and non-financial information, for examples the CEO's reports and the industry news.
It serves to guide the auditor on obtaining audit evidence through the application of an appropriate mix of tests of control systems and substantive tests of transaction and balances. It requests the auditor to obtain 'sufficient' and 'appropriate' audit evidence in order to draw reasonable conclusions on which to base the audit opinion.
Substantive test of transactions: evaluate the client's recording of transactions by verifying the monetary amounts of transactions, a process called substantive tests of transactions. For example, the auditor might use computer software to compare the unit selling price on duplicate sales invoices with an electronic file of approved prices as ...
For example, reliability of internal control procedures, and analytical review systems. In the control testing stage, audit evidence is used by the auditor to consider the mix of audit test of controls and audit substantive tests. [9]
Based on testing data from the Insurance Institute for Highway Safety, or IIHS, and the National Highway Traffic Safety Administration, or NHTSA, these are some of the safest cars available today.
Analytical procedures in magnetostratigraphy, a geophysical technique used for rock dating; Analytical procedures used in statistical geography; Procedures used in environmental systems analysis, describing human impacts on the environment to support decisions and actions aimed at perceived current or future environmental problems
Italy's competition watchdog AGCM closed an investigation into Booking.com as it found commitments offered by the online travel platform sufficient to address the competition concerns it had ...