ACCA F8 考试：ISA 330 AND RESPONSES TO ASSESSED RISKS (Part 2)
SUBSTANTIVE PROCEDURES AND TESTS OF DETAIL – OVERVIEW
ISA 330 requires that the auditor shall always carry out substantive procedures on material items irrespective of the assessed risks of material misstatement, and that the auditor shall design and perform substantive procedures for each material class of transactions, account balance, and disclosure. According to the IAASB Glossary of Terms 1, substantive procedures fall into two categories, ‘tests of details’ and ‘substantive analytical procedures’ (or simply ‘analytical procedures’, as they are usually described). ISA 330 says that auditors must decide when it is most appropriate to use which type of substantive procedure. Analytical procedures are outside the scope of this current article, and the examples given below are examples of tests of details.
Substantive procedures – examples of tests of detail for a purchases system
Substantive procedures will invariably tend to involve more work than tests of control. Consider once again the example of the purchases system for a manufacturing company and the assertion of existence for account balances in the statement of financial position. Typical tests of detail would involve some physical verification of year-end balances outstanding, which would require obtaining and reviewing the closing purchase ledger account balances for a sample of purchase ledger accounts with selected suppliers. Typically, this could include agreeing the closing balance figure to the supplier’s statement, or even possibly requesting third party confirmation by the supplier of the amount outstanding.
Cut-off testing would also be typically carried out on year-end purchase ledger balances, which would involve obtaining a sample of pre- and post - year-end goods received notes, and agreeing these to the matching pre- or post-year-end purchase invoices, to ensure that only goods received before the end of the accounting period were included. This test would also help to confirm the assertion of existence.
ISA 330 indicates that the auditor may perform tests of control or substantive procedures at an interim date or at the period end. The standard also indicates that, in general, the extent of audit procedures increases as the risk of material misstatement increases.
ISA 330 lists the following overall responses that may be used by auditors in order to address the assessed risks of material misstatement at the financial statement level:
? Emphasising to the audit team the need to maintain professional scepticism.
? Assigning more experienced staff, those with special skills, or using experts.
? Providing more supervision.
? Incorporating additional elements of unpredictability in the selection of further audit procedures to be performed.
? Making general changes to the nature, timing or extent of audit procedures.
Assessing risk lies at the core of the audit process and this article has introduced and explained some of the terminology used by ISA 330, giving guidance to auditors on how to respond to assessed risks.
In general, tests of control are short, quick audit tests, whereas substantive procedures will require more detailed audit work. ISA 330 requires that, irrespective of the assessed risks of material misstatement, the auditor shall design and perform substantive procedures for each class of transactions, account balance and disclosure.
Finally, students should try to identify tests of control and substantive procedures for the main accounting systems.
1 IAASB Auditing Handbook 2010, Glossary of Terms.
Last updated: 20 Apr 2015