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Substantive testing is the detailed testing of transaction in order to determine Material Misstatement at assertion level.
First Auditor perform Test of Control to determine the operating effectiveness of Controls,When Test of controls confirm the transactions may be contained Material Misstatements then Auditor will go Substantive testing to confirm transactions at detailed level.
Substantive testing is an audit procedure that examines the financial statements and supporting documentation to see if they contain errors. These tests are needed as evidence to support the assertion that the financial records of an entity are complete, valid, and accurate.
There are many substantive tests that an auditor can use. The following list is a sampling of the available tests:
it means to test the material in corrent way. this procedure insures that there is no misstatement of documentation.
When an auditor assesses the control risk as high, he will not be able to adopt a system based approach to the audit. Instead he will carry out extensive substantive testing.
Substantive tests are audit procedures carried to detect any material misstatements in the figures reported in the financial statements. They are designed to obtain evidence about the financialstatement assertions . They include:
1. Tests of detail on transactions, account balances and disclosures and
2.Aanlytical procedures.