help!! how to answer question on substantive procedure ?
for example substantive procedures over bank balance. how should i see this question and answer it ? based on what ?
i am not a 100% sure about this but i take it more like an audit procedure. Like for the procedures you would do to check the accuracy etc of the bank balance
- you can review prior year bank balance against current year and discuss any significant difference.
- you can tally the client's banked amount against bank statement/bank (cash) certificate to confirm if both show similar amounts.
- you can also may be recalculate the bank amount by reviewing the invoices
(hoping i am not wrong)
Totally agree with the answer given. You are merely listing procedure for proof of account balances.
One way to remember is to use the assertions concept which for bank and cash is existence, rights and obligations, completeness and allocation and valuation.
hope that helps.