Substantive Testing and Analytical Procedures in Audit

Tutorial Questions

TABLE OF CONTENTS
MCQ................................................................................................................................................1
REVIEW QUESTIONS...................................................................................................................1
9.11 Purpose of the substantive testing and examples of types of substantive tests....................1
9.13 What are analytical procedures and how they could be used as substantive tests in audit..1
9.15 How the decisions on how much and when substantive testing is performed related to
overall risk assessment for item tested. .......................................................................................2
9.23 Problems with using Haddin's audit program as the basis for designing substantive
procedures for the Sangekar.........................................................................................................2
9.24 Procedures addressing the assertions ..................................................................................3
9.30 Persuasiveness of the evidence from the analytical procedures..........................................3
REFERENCES................................................................................................................................5

MCQ
Q.1 – C
Q.2 - D
Q.3 - B
Q.4 - C
Q.5 - B
Q.6 - B
Q.7 - C
Q.8 - C
Q.9 - B
Q.10 - D
REVIEW QUESTIONS
9.11 Purpose of the substantive testing and examples of types of substantive tests
Substantive testing refers to audit procedure which examines financial statements and the
supporting documentations for identifying the errors and mistakes. Tests are required as the
evidence for supporting assertion that financial records of entity are valid, complete and
accurate. There are many types of substantive tests that the auditor could use. Following are
examples of substantive testing
 Confirming validity of the calculations for inventory valuations
 Physical match of the fixed assets to records
 Issuing bank confirmation for testing ending cash balance
 Contacting lenders for confirming loan balances
9.13 What are analytical procedures and how they could be used as substantive tests in audit.
Analytical procedures could be described as evidence used in the audit. The procedures
indicate possible issues with financial records of client, that could be then investigated
thoroughly (Saadullah and Elsayed, 2020). It involves comparison of the different sets of the
financial as well as operational information to identify if the historical relations have continued
forward in period under review.
Analytical procedures could be used as the substantive test for obtaining evidential
matters about the particular assertions related to the account balances or the class of transactions.
Reliance of the auditor on substantive tests for achieving the audit objective related to particular
assertion could be derived from the test of details. Decision about the procedures is used for
achieving specific audit objective based over judgement.
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