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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.
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]
Shop staff were robbed at knifepoint during a "terrifying incident" that resulted in £80 being stolen, police have said. A man in his 20s has been arrested on suspicion of robbery in connection ...
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 ...
The footage is a hilarious example of how a jacket becomes the official "taking the dog for a walk" coat. The dog was so confused. Dad's jacket was on, ...
Saquon Barkley won't get a chance to break the NFL single-season rushing record after all.. The Philadelphia Eagles running back won't play in the team's Week 18 game against the New York Giants ...