Substantive procedures or tests can be described as
A) procedures to detect errors in the accounts.
B) audit procedures to detect material misstatements at the assertion level.
C) procedures to assess audit risk.
D) audit procedures to evaluate the operating effectiveness of internal controls.

Question

Quizplus · Accepted Answer

Substantive procedures or tests are audit procedures specifically designed to detect material misstatements at the assertion level. They are typically performed after the auditor has concluded their assessment of the client's internal controls. These procedures include substantive analytical procedures and substantive tests of details, such as testing individual transactions or account balances. The objective of substantive procedures is to gather sufficient and appropriate audit evidence to support the auditor’s opinion on the financial statements. Options A, C, and D are incorrect as they do not accurately describe substantive procedures.

Substantive Procedures or Tests Can Be Described as