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.

Examine a sample of duplicate sales invoices to determine whether each one has a shipping document attached.

THATS THE COMPLETE QUESTION GIVEN TO YOU.

Answer 1

In the given case, the auditor is examining a sample of duplicate sales invoices to determine whether each one has a shipping document attached.

This kind of invoice-checking falls under the broad category of Substantative Procedures in the Audit Process.

A Substantative Procedure involves the auditors efforts to outline and execute a plan or test that helps the auditor to gather conclusive evidence regarding the completeness, accuracy and existence of financial statement accounts. It involves Analytical Procedures (where current performance and variations can be compared with previous years and peers) and Test of Detail procedures (which involve invoice checking, ledger scrutiny, etc.)

This is an example of Test of Details, Substantative Procedure.