Audit Tests

Involve examining support for the closing balance directly.

• tests of details of balances

• vouching

• scanning

• tests of details of transactions

Made to provide evidence about the effectiveness of the design and operations of internal control structure policies and procedures.

• auditing procedures

• tests of controls

• reperformance

• tests of details of transactions

Involve examining support for the individual debits and credits posted to an account.

• tests of details of balances

• tests of controls

• tests of details of transactions

• analytical procedures

What is the purpose of tests of control ?

• To provide audit evidence as to the completensess,accurary,and validity of the information contained in the accounting records

• To permit the auditor to emphasise certain population items and de-emphasise the others

• To determine to what extent the internal control systems comply with the stated policies,plans,laws and regulations

• Used to supplement other samples when there is a nigh likehood of misstatements for a known time period

The auditor's understanding of internal controls is used to assess control risk for each transaction-related audit objective;

• Tests of Controls

• Tests of Transactions

• Analytical Procedures

• Tests of Details of Balances

Tests of controls are performed only on those controls that the auditor has determined are suitably designed

• To rely internal controls without extending substantive test.

• To prevent, or detect and correct, a material misstatement in an assertion.

• To obtain sufficient appropriate audit evidence.

• To respond assess risk.

The Test of Control audit determines the _____ of internal controls in detecting _____

• Structure, Errors

• Design, Errors

• Effectiveness, Material Misstatement

• Effectiveness, Design Flaws

Substantive tests include: ____

• Analytical procedures, Tests of details of balances

• Analytical procedures, Tests of details

• Tests of details, tests of controls

• All are correct

Tests of controls are designed to provide evidence to support an assessment of control risk at a level below high

• True

• False

Tests of controls decrease detection risk

• True

• False