Question

The following is an audit procedure that an auditor performs relating to the financial report audit of a client.

Identify the broad category of audit test that is performed for the audit procedure.

(Hint: The possible answers would include test of control, substantive test of ..., etc.)

Note: No marks will be given if more than one category of audit test is answered.

Determine whether all risks related to accounts receivable are adequately disclosed.

Answer 1

There are three broad categories  of audit tests

1.Risk assessment

2.Test of controls

3.substantive procedures

Determine whether all risks related to accounts receivable are adequately disclosed , the broad category of audit test performed for this procedure is Substantive procedures.

This audit test is used to evaluate  whether there is material misstatement in transactions or ending balances.There are two sub type in this category , they are Test of details and substantive analytical procedure.