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More in Audit Evidence & Procedures
What are the main types of audit procedures? What is vouching and what is tracing? Why is inquiry alone usually insufficient audit evidence? What factors affect the reliability of audit evidence? What is external confirmation and when is it used? What is the difference between a test of details and a substantive analytical procedure? What are subsequent events and how does the auditor address them? What is a management representation letter and what is its purpose? What is cutoff testing and why is it important? What is reperformance and how does it differ from recalculation?
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What is the difference between tests of controls and substantive procedures?

Intermediate

Answer

Tests of controls evaluate whether controls operate effectively to prevent or detect misstatements (supporting a lower control-risk assessment). Substantive procedures detect material misstatements directly at the assertion level, comprising tests of details and substantive analytical procedures. If controls are relied upon, tests of controls are needed; substantive procedures are always required for material items.
Real-world example The auditor tests the approval control on purchases, then substantively tests a sample of balances regardless.

Common follow-ups: When are tests of controls required? | Are substantive procedures always needed?

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All 18 Audit Evidence & Procedures questions