Identify a test for each substantive procedure

Assignment Help Auditing

Reference no: EM133843603

Overview

Substantive tests are auditing processes used to find or prevent miscalculations in financial records. Substantive tests provide a record of financial activity alerting professionals to do further review. There are three types of substantive tests: analytical tests, tests of transaction details, and tests of balance details. These tests generally cover the following categories: transactions, account balances and disclosures. There is a difference between substantive procedures and substantive tests. Substantive procedures are designed to detect material misstatements based on assertions. Substantive tests examine details of transactions, account balances, and disclosures.

Directions

For this homework you will complete the Substantive Tests Homework Template found in the What to Submit section to compare the ways substantive tests are applied to different types of financial statements. Use the resource, Seven Examples of Substantive Procedures, found in the Supporting Materials section as a guide.

Specifically, you must address the following criteria:

A. Explain the difference between substantive testing and internal control testing.

B. Identify a test for each substantive procedure.

a. Long-term debt obligations
b. Accounts payable
c. Accounts receivable
d. Cash
e. Fixed assets

C. Recommend the key internal control for the substantive test.

Reference no: EM133843603

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