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Substantive Testing (Levels of audit evidence (Persuasive evidence (is…

- - - - manipulation, fraud
      - material
      - high volume to high fraud
  - - - compare monthly income to budget and account for fluctuations or absence of expected fluctuations
    - - compare budgeted and actual revneues by month, corraborate some reasons why there are variations
    - - Enquire staff about variations
- - - - Key item testing
        
        Identify key balances and test them
      - Representative testing
        
        if further testing is required, sample data to test
      - Analytical procedures
        
        most persuasive test of balances
        
        involves testing figures, and financial statements (vertical analysis/ trend analysis
    - - Computer assisted audit techniques (CAATs) can be used to test complex tasks and large sets of data
      - Useful when client controls are strong