Audit substantive test
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Substantive procedures (or substantive tests) are those activities 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.
Management impliedly assert that account balances and underlying classes of transaction do not contain any material misstatements: in other words, that they are materially complete, valid and accurate. Auditors gather evidence about these assertions by undertaking activities referred to as substantive procedures.
[edit] Examples
For example, an auditor may: physically examine inventory on balance date as evidence that inventory shown in the accounting records actually exists (validity assertion); arrange for suppliers to confirm in writing the details of the amount owing at balance date as evidence that accounts payable is complete (completeness assertion); and make inquires of management about the collectibility of customers' accounts as evidence that trade debtors is accurate as to its valuation. Evidence that an account balance or class of transaction is not complete, valid or accurate is evidence of a substantive misstatement.
[edit] Types of procedures
There are two categories of substantive procedures - analytical procedures and tests of detail. Analytical procedures generally provide less reliable evidence than the tests of detail. Note also that analytical procedures are applied in several different audit stages, whereas tests of detail are only applied in the substantive testing stage
