ExpertMedium2 marksMultiple Choice
ACCA · Question 12 · Business & Technology
Section A
During the external audit of "FinTech Pay", the auditor decides to select a sample of actual sales invoices and trace them through the accounting system to ensure the monetary amounts recorded in the financial statements are accurate.
Which type of audit procedure is the auditor performing?
Section A
During the external audit of "FinTech Pay", the auditor decides to select a sample of actual sales invoices and trace them through the accounting system to ensure the monetary amounts recorded in the financial statements are accurate.
Which type of audit procedure is the auditor performing?
Answer options:
A.
Test of controls
B.
Substantive testing
C.
Compliance testing
D.
Analytical procedures
How to approach this question
Distinguish between checking the 'system' (controls) and checking the 'numbers' (substantive). Tracing invoices to verify amounts is checking the numbers.
Full Answer
B.Substantive testing✓ Correct
Substantive testing involves gathering evidence to verify the actual amounts and disclosures in the financial statements. Tracing invoices to the ledger to confirm the correct monetary value is a substantive procedure.
Common mistakes
Confusing substantive testing with tests of controls.
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