[Someday-I will be a CPA]

Hi – I think I’m getting myself confused with the various terminology and none of my study books show this breakdown in a matter that I can easily figure out. Can some help me with the following terms and how they correlate during the engagement of an audit?

-Analytical Procedures

-Substantive Procedures

-Test of Controls

-Test of Details

I’m sure I’m missing a few. Thanks for your help!!

[amandafaith15]

Analytical procedures are mainly higher level procedures to look at the full picture of the financial statements. The most common are ratio analysis. These are REQUIRED during the planning and final review stages of the audit, however they are only optional during the evidence gather stage.

Substantive procedures are performed at a transaction level and can be divided into 2 categories: test of details and test of controls.

Test of controls only need to be performed when relying on internal controls already in place during your audit. The tests of controls are designed to test the effectiveness of the company's internal controls.

Test of details are used to verify account balances, transactions, etc., during the audit.

I really hope that helps, and if anyone has corrections please speak up.

I take my Auditing test tomorrow and am praying I am studying all the right things!

REG -73 (8/2015) 81 (10/2015)
AUD - 73 (11/2015) 84 (1/2016)
BEC - 84 (2/2016)
FAR - 77 (6/2016)

[FAR_WARS]

I use Roger's ICORRIIA mnemonic to remember substantive procedures. I then combine with Jeff's IRON mnemonic to remember which ones are tests of controls. The remaining procedures are tests of details.

Inquiry (control)
Confirmation (details)
Observation (control)
Recalculation (control)
Reperformance (details)
INspection of Assets (control)
INspection/examination of Documents (control)
Analytical procedures (details)

anyone have a better way to remember this?

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Author]

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