Substantive procedures are also known as _______.
A)tests of details
B)tests of controls
C)tests of complex transactions
D)risk assessment

Question

Quizplus · Accepted Answer

Substantive procedures are performed to obtain evidence about material misstatements in the financial statements. They are also known as tests of details, as they focus on specific account balances, transaction classes, and disclosures. Tests of controls, on the other hand, assess the effectiveness of the entity's internal control over financial reporting. Tests of complex transactions are a type of substantive procedure that focuses on highly unusual or non-routine transactions. Risk assessment is a separate phase of the audit process where the auditor identifies and assesses the risks of material misstatement in the financial statements.

Substantive Procedures Are Also Known as _______