Auditing - What is Substantive Tests

Substantive tests are crucial in auditing financial statements. They include substantive analytical procedures, which involve analyzing financial data for reasonableness, and substantive tests of details, which focus on verifying detailed support for financial statements. While effective internal controls can reduce the need for extensive substantive testing, auditors must always perform these tests in high-risk areas to ensure accuracy and reliability.

What are substantive tests and why are they performed?

What are substantive analytical procedures and what do they involve?

Can you provide examples of substantive analytical procedures?

What do substantive tests of details involve?

Under what circumstances can substantive test work be reduced or modified?