While substantive procedures may support the accuracy of underlying records, these tests frequently provide no affirmative evidence of segregation of duties because:
A)substantive procedures rarely guarantee the accuracy of the records if only a sample of the transactions has been tested.
B)the records may be accurate even though they are maintained by persons having incompatible functions.
C)substantive procedures relate to the entire period under audit, but compliance tests ordinarily are confined to the period during which the auditor is on the entity's premises.
D)many computerized procedures leave no audit trail of who performed them, so substantive procedures may necessarily be limited to inquiries and observation of office personnel.

Question

Quizplus · Accepted Answer

Substantive procedures may support the accuracy of underlying records, but they do not provide affirmative evidence of segregation of duties. This is because the records may be accurate even though they are maintained by persons having incompatible functions. Substantive procedures are designed to obtain evidence about the accuracy and completeness of the underlying transactions reflected in the accounting records. They rarely guarantee the accuracy of the records if only a sample of transactions has been tested. Compliance tests are designed to obtain evidence about compliance with laws, regulations, and policies. Substantive procedures relate to the entire period under audit, whereas compliance tests are ordinarily confined to the period during which the auditor is on the entity's premises. Computerized procedures may limit the auditor's ability to perform substantive procedures if there is no audit trail of who performed them, so the auditor may need to rely on inquiries and observations of office personnel.

While Substantive Procedures May Support the Accuracy of Underlying Records