Which of the following procedures would be considered a test of controls?
Auditor reviews the check register for unrecorded liabilities
Auditor verifies client calculation of unexpired insurance premium.
Auditor reviews purchase orders for indication of supervisor approval
Auditor confirms all all customer receivable balances over $50,000
"Auditor reviews purchase orders for indication of supervisor approval" would be considered as test of controls. The control that is being tested here is the control which is the Approval of supervisor for releasing purchase orders.
The other cases would be considered as Substantive testing which is basically performed to detect misstatement or fraud at the assertion level.
Check register is a document and the same is checked for ensuring completeness of the balance of Unrecorded liabilities.
Calculation of unexpired insurance premium is verified for ensuring completeness of the balance unexpired insurance premium and accuracy of insurance premium charged off.
Confirmation from Customers over receivable balances is done to ensure the assertion of existence and rights & obligations of the Receivable balances
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