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Unformatted text preview: environment, including its internal control. Examples include(1) inquires of management and others and (2) observation and inspection.-Tests of control-are audit procedures performed to test the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the relevant assertion level. Examples include (1) observation of the application of specific controls and (2) inspection of documents, reports and electronic files.-Substantive procedures- are designed to detect material misstatements in a transaction class, account balance, and disclosure component of the financial statements. There are two categories of substantive procedures: (1) tests of details and (2) substantive analytical procedures. An example of each are (1) Tests of details on account balances and (2) examination of trends and ratios....
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 470 taught by Professor Kwong during the Spring '11 term at Franklin.
- Spring '11