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Substantive Testing, Types of Audit Procedures, Receivables Confirmation…
Substantive Testing
Substantive procedures are tests to obtain audit evidence to detect material misstatement (i.e. monetary error and omission) in the financial statements.
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Receivables Confirmation Letter
- External confirmation is audit evidence obtained as a direct written response to the auditor from a third party.
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Bank Confirmation Letter
It can be used to ask a variety of questions, including queries about outstanding interests, contingent liabilities and guarantees.
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Bank Confirmation Letter
It can be used to ask a variety of questions, including queries about outstanding interests, contingent liabilities and guarantees.
Information that can be requested:-
- Balances due to or from the client on current, deposit, loan and other accounts
- Any NIL balances on accounts
- Accounts closed during the period
- Maturity and interest terms on loans and overdrafts
- Unused facilities
- Lines of credit / standby facilities
- Any offset or other rights or encumbrances
- Details of any collateral given or received
- Contingent liabilities
- Confirmation of securities and other items in safe custody