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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.
Risk assessment procedures are used to assist the auditor to better understand the business and to plan the nature, timing and extent of audit procedures. Substantive analytical procedures are used to obtain evidential matter about particular assertions related to account balances or classes of transactions. [3]
It is stated in ISA 315 (paragraph A.124) that the auditor should use assertions for classes of transactions, account balances, and presentation and disclosures in sufficient detail to form a basis for the assessment of risks of material misstatement and the design and performance of further audit procedures.
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] In the substantive testing stage, audit evidence is defined as the information that the auditor needs to support the appropriation of financial statement assertions. [10]
Both United States and International auditing standards include guidance related to financial statement assertions, although the specific assertions differ. The PCAOB and the IFAC address this topic in AS 1105 [ 6 ] (updated from AS 15 [ 7 ] as of December 31, 2016) and ISA 315, respectively. [ 4 ]
An information technology audit, or information systems audit, is an examination of the management controls within an Information technology (IT) infrastructure. The evaluation of obtained evidence determines if the information systems are safeguarding assets, maintaining data integrity , and operating effectively to achieve the organization's ...
Democrats are more likely than Republicans to claim they feel the need to limit their media consumption of stories about government and politics overall, at 72% vs. 59%. Read On The Fox News App
Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits are performed and may be judged. Several organizations have developed such sets of principles, which vary by territory.