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Why is inquiry alone usually insufficient audit evidence? What factors affect the reliability of audit evidence? What is the difference between tests of controls and substantive procedures? What is external confirmation and when is it used? 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? What is directional testing? How does the auditor evaluate the work of a management's expert?
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What is the difference between a test of details and a substantive analytical procedure?

Intermediate

Answer

A test of details examines individual items—vouching transactions to documents, confirming balances, recalculating. A substantive analytical procedure evaluates plausibility by studying relationships among financial and non-financial data (e.g., expecting payroll to move with headcount). Tests of details give direct evidence on items; analytics give evidence about reasonableness of a total.
Real-world example The auditor estimates expected rent expense from lease terms (analytics) and also vouches selected payments to invoices (details).

Common follow-ups: When are analytics more efficient than details? | What builds a reliable expectation?

Analytical Procedures Audit Sampling Audit Evidence & Procedures
All 18 Audit Evidence & Procedures questions