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level: Substantive Procedures

Questions and Answers List

Question	Answer
In audit planning, the auditor has to decide what specific substantive procedures to perform. This includes determining how much emphasis should be placed on tests of details vs substantive analytical procedures. Which procedure is more labor intensive and costly and why?	Test of Details - Tend to be labor intensive and expensive, but which provide a relatively stronger basis for conclusions for most financial statement assertions
In audit planning, the auditor has to decide what specific substantive procedures to perform. This includes determining how much emphasis should be placed on tests of details vs substantive analytical procedures. Which procedure is more less labor intensive and why?	Substantive Analytical Procedures - Tend to be less labor intensive and less expensive, but which provide a relatively weaker basis for conclusions for most financial statement assertions
Under auditing of a 'non-issuer', is performing Test of Controls required?	No. Performing Test of Controls is REQUIRED under an audit of an 'Issuer' (PCAOB)
What are the two (2) categories performed under 'Substantive Procedures' for an audit?	(1) Test of Details a. Test of ending balances b. Test of Transactions (2) Substantive Analytical Procedures