TEST OF CONTROLS

TEST OFCONTROL
• An audit procedure used to evaluate the
effectiveness of the client internal controls

• It aims to determine whether the internal

controls are effective in preventing risk of
material misstatement

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 PURPOSE OF TEST OF CONTROLS

• There are several reasons to perform tests of

control in auditing. If a company’s internal
controls are working effectively, it reduces the
need for additional substantive audit procedures,
which can be time-consuming and costly. Another
purpose of these tests is to obtain further audit
evidence to support the auditor’s statements.
 Audit sampling methods for
Tests of control fall into four main categories:

• Inquiry: At the first stage, auditors may ask

clients to explain their control processes.
Simply inquiring about procedures qualifies as
a test of control, but it provides limited
evidence, so it will need to be supplemented
with additional audit sampling.