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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.
The auditor uses assertions in assessing risks by considering potential misstatements that may occur, and thereby designing audit procedures that are responsive to the particular risks. Assertions used by the auditor fall into the following categories: (a) Assertions about classes of transactions and events for the period ended: Occurrence
At this stage, if the auditor accept the CR that has been set at the phase I and does not want to reduce the controls risk, then the auditor may not perform test of control. If so, then the auditor perform substantive test of transactions. This test determines the amount of work to be performed i.e. substantive testing or test of details. [27]
By using a vouching or a voucher system a company will have concrete and solid documentation and evidence of expenses, capital, and written proof in audits. Vouching is the essence or backbone of auditing because when performing an audit, an auditor must have proof of all transactions.
Customers who purchased Deep River brand potato chips labeled “Non-GMO Ingredients” may be eligible for a cash payment from a class action settlement. Old Lyme Gourmet Co., the company behind ...
An Indian company says an email informing staff that admitted to burnout had been fired was in reality part of an elaborate ruse to raise awareness over workplace stress.
is buying Shutterstock to create a $3.7 billion visual content company. “With the rapid rise in demand for compelling visual content across industries, there has never been a better time for our ...