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Substantive Testing (Levels of audit evidence (Persuasive evidence (is…
Substantive Testing
Levels of audit evidence
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Minimal evidence
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e.g. testing of this year and previous year to identify problems, not form opinion
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Sales/ revenue testing
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Tests done
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analytical procedures
compare budgeted and actual revneues by month, corraborate some reasons why there are variations
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Audit risk model
AR = f(IR, CR, DR)
If IR and CR are low, auditor will accept high DR and do more less substantive testing, more controls testing
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Nature, timing and extent of substantive procedures
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