Types of Substantive Tests

Although there are a wide variety of substantive tests that can be employed, they can be classi-
fied in the following categories:
 Inquiries of management regarding matters of concern
 Confirmation from third parties of information incorporated in management's
assertion
 Comparison of information incorporated in management's assertion to other related
in-
formation
 Observation of assets or procedures
 Recalculation of information developed by the client
 Examination of documents supporting management's assertion
 Analytical procedures

I C COREA (/ see Korea) every time I audit my manufacturing client

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Evidence - Module 3

~es of Substantive Tests (continued)

Substantive tests may be test of details or analytical procedures

Tests of details are designed to corroborate or contradict specific management assertions

 Tests of details include inquiries, confirmation, comparison, observation, recalculation,

and examination

 The result of the test will be information that either agrees with or does not agree with in-
formation presented or disclosed in the financial statements
Some information cannot be directly corroborated or contradicted

 Analytical procedures provide evidence as to the reasonableness of management's as-

sertions

 Analytical procedures involve comparing information in the financial statements to

expectations to evaluate the relationships
 Analytical procedures may involve financial & nonfinancial data

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Evidence - Module 3 93