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In compliance testing you gather evidence with the objective of testing an organization's compliance with control procedures, eg. when you run a report to verify that certain controls had been applied over a database table.
In substantive testing, you gather evidence to evaluate the integrity of data, a transaction or other information. eg. you run a report to verify if the amount paid to vendors is accurate.
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Name four primary components of the bank secrecy act?
A system of internal controls, including risk-based policies and procedures; designated individual responsible for compliance; ongoing training; and independent testing.
Difference between vouching and verification?
Vouching is the process of recognising obligation and authorizing cash disbursements. It deals with the examination of PROFIT AND LOSS items. For example, you see that a company has said to make a payment for that particular object. To ensure this, you need to "find evidence" by vouching it to things like invoice, official receipt, bank statement etc. Normally you vouch to original supporting documents, not photocopies. IT is like tracing it to make sure that the transaction has indeed occured/genuine. This is generally a step in assurance. Or say, the company made a purchase.. these can be traced to purchase order, invoice etc. As for verification, auditors are normally required to see that the supporting documents are verified whilst auditing.Verification is normally done by a nominated person in the company which involves reviewing, inspecting and checking to ensure that the documents conform to specific requirements. On the other hand, there's another physical verification which is done by the auditors themselves. This is an auditing procedure whereby auditors inspects the actual assets of the company to make sure that they are the same with the written records.It is a substantive audit procedure which deals with examination of BALANCE SHEET transactions/items whether they are assets or liabilities are properly stated. Normally we do this by selecting samples or in some audit firms, setting a scope. For example, we do stocktakes =) Main difference between the duo: Vouching is the substantive testing/examination of transaction at their POINT OF ORIGIN whereas Verification usually deals with the FINAL BALANCE in the Final Accounts viz the balance sheet and profit and loss
Where sites can I go to complete my qa testing online and at a reasonable price?
You can go to training-classes.com. The offer online QA testing for reasonable prices.
What is the final testing phase when developing an accounting information system?
Acceptance testing ensures that the modifications meet user expectations and that the entire AIS performs as designed.
Maxall company audit solution?
Meaning of Substantive Audit and the approach applied in EM's Audit of Maxall.What do you think the auditors meant by the term "Substantive Audit"? Was the substantive approach appropriately applied in EM's audit of Maxall?Here the term substantive Audit refers to the test of account balances with respect to the transactions relating to it.Yes the substantive approach was appropriately applied in this audit which was confined to Accounts Receivables, in relation to sales.Comparison of Audit Procedures that are in accordance with Generally Accepted Auditing Standards.Identify and discuss specific audit process/procedures that the auditor(s) performed that were in accordance with Generally Accepted Auditing Standards.We have got three types of tests performed under substantive audits, as per the Generally Accepted Auditing Standards, namely(I) Test of Transactions,(II) Test of balances(III) Analytical review procedures.(I) Test of transaction: It is an auditing procedure related to examining specified transactions and supporting documentation. It is part of the testing process used by the auditor to check internal-controls reliability. It is undertaken to gather evidence so that an audit opinion can be rendered as to the fairness of financial statement presentation. Included in such a test is verifying transaction amounts and tracing transactions to accounts in the financial statements.Here this test was confined to Accounts receivable, sales and inventory.(II) Test of Balances When EM compares the book balance of cash to the book balance, it is a test of balances. This is the step in which the Auditor seeks to obtain sufficient evidence to make a final judgment on the extent of losses or account misstatements that have occurred or might occur.Here, in this audit, the CPA's obtained evidence relating to the Accounts receivables with respect to the sales made during the year. They found out that 6 invoices made at the year end and confirmed those with the concerned customers.(III) Analytical review is an auditing process that tests relationships among accounts and identifies material changes. It involves analyzing significant ratios and trends for unusual changes and questionable items. Included in the analytical review process are: (1) reading important documents and analyzing their accounting and financial effects; (2) reviewing the activity in an account between interim and year-end, especially noting entries out of the ordinary; and (3) comparing current period account balances to prior periods as well as to budgeted amounts, noting reasonableness of account balances by evaluating logical relationships among them (i.e., relating payables to expenses, accounts receivable to sales).Only a part of Analytical review was made by EM for this company. They made certain adjustments relating to sales and Provision for doubtful debts.Identification of Audit Errors made by EM and Precautionary measures to be taken.Identify the specific audit errors made by EM and discuss what the auditorshould have done to avoid the errors.Inherent risk is the susceptibility of EM audit area to error which could be material, individually or in combination with other errors, as there were no related internal controls. Here we can see a possible error relating to Material. The material level was fixed at $35000 for 20x1 and $50000 for 20x2 which was not substantiated. There is no proper evidence to set these levels for the Material. As per the CPA standards the Material Level should beUnder single Rule5% of pre-tax income0.5% of total assets1% of equity0.5% of total revenuesOrUnder Variable rule2 to 5% of gross profit, if less than $20,0001 to 2% of gross profit, if between $20,000 and $1 million0.5 to 1% of gross profit, if between $1 and $100 million0.5% of gross profit, if more than $100 million.These rules have not been followed here.Comparison of audit in compliance with latest professional guidance.The scope of a forensic audit is to fix blame or answer a question. A forensic audit seeks proof, not reasonable assurance. Here the auditors have conducted a normal audit. When they found out the sales made in late December 20x1 and 20x2 to Balco limited, was given 90 to 120 days credit limit, they should have enquired into the reasons behind it and should have gathered enough evidence for evaluating the credibility of the customer. But they accepted the Mary Maxwell assurance for this customer. This evidence clearly shows that this audit was not conducted entirely in compliance with the professional guidance regarding the forensic-type phase of audit.
What is compliance and substantive test in auditing?
In compliance testing you check the design, implementation and operations of controls and substantive testing you actually verify the accuracy of the transactions e.g. test samples
What is compliance and substantive tests in internal auditing?
In compliance testing you check the design, implementation and operations of controls and substantive testing you actually verify the accuracy of the transactions e.g. test samples
What is substantive test of transaction?
testing for completeness and existance.
Software testing related interview questions?
Here are 15 software testing interview questions: What is software testing? What is the difference between functional and non-functional testing? What is the difference between manual and automated testing? What are the different types of testing? What is a test case? What is regression testing? What is the difference between black-box and white-box testing? What is the V-Model of software testing? What is exploratory testing? What is smoke testing? What is the difference between severity and priority of a bug? What is the purpose of test automation? What is the defect life cycle? What is the difference between Load Testing, Stress Testing, and Performance Testing? What is the role of a Test Manager in a testing team?
What is difference between Maintainability testing and Maintance testing?
sorry
Difference between functionality testing and load testing?
Functionality testing is what is expected. Load testing is what it actually did.
Why do Auditors use Substantive Procedures?
Substantive procedures performed by the auditor during the substantive testing stage of the audit that gather evidence as to the completeness, validity and/or accuracy of account balances and underlying classes of transactions.
What is the major difference between regression testing and retesting?
regression testing is a white box testng
What is difference between Smoke and sanity testing with examples?
htyh
What is the difference between testing a single mean and testing the difference between two means?
A single mean is used in testing to compare a single variable to a population mean in order to determineÊif there is aÊdifference. Two means are used in testing to compare two populations to see if there are variances between the two variables.Ê
Why you do compliance test?
In compliance testing we generally check that the application will follow the company standards or not. So we done compliance testing to check the application will follow all the company standards and will not regulate any laws of the company.Ex. company logo etc
What is difference between thread based and use based strategies for integretion testing in object - oriented methodology?
difference b/w thread based and use based testing
