Assertions and Types of Audit Procedures

Question 1

List the three categories of audit procedures.

Answer 1

1. )Risk assessment procedures
2. )Tests of control
3. )Substantive procedures

Question 2

What are risk assessment procedures?

Answer 2

Procedures performed to obtain an understanding of the entity and its environment, including internal control, to assess the risk of material misstatement, whether due to fraud or error

Question 3

What are substantive procedures?

Answer 3

Procedures performed to detect material misstatements at the relevant assertion level; these consist of tests of details and substantive analytical procedures

Question 4

What are tests of control?

Answer 4

Procedures performed to obtain information about the operating effectiveness of controls in preventing or detecting and correcting material misstatements at the relevant assertion level