In a financial report audit, substantive tests are audit procedures that:
A) a re designed to discover significant subsequent events.
B) may be either tests of transactions, tests of balances, tests of disclosure or analytical procedures.
C) will decrease proportionately with the auditor's assessed level of control risk.
D) may be eliminated under certain conditions.

Question

Quizplus · Accepted Answer

Substantive tests in a financial report audit can be tests of transactions, tests of balances, tests of disclosure or analytical procedures. These tests are performed to obtain evidence to support financial statement balances or disclosures and are not contingent on the auditor's assessed level of control risk. Therefore, option A and C are not correct. Option D is also incorrect as substantive tests cannot be eliminated as they are necessary to obtain appropriate audit evidence.

In a Financial Report Audit, Substantive Tests Are Audit Procedures