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Can Anyone Explain Primary Substantive Testing Techniques?

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The substantive procedure depends upon vouching for testing the completeness, accuracy and validity of data. The vouchers are compared with entries in the books of accounts. The checking of vouchers and then inspecting the books for recorded data is called vouching. The substantive procedure relies on inspection technique. It is concerned with review or examination of records, documents or tangible assets. Physical inspection of assets is means of testing the existence. The documents of ownership must be examined before physical checking of assets.

Confirmation is an audit technique under substantive procedure. The auditor can collect information from debtors, creditors, bankers, lawyers, valuers and other persons outside the business. It is a strong evidence of balance or transactions relating to business under audit. Computation is a technique for substantive procedure. The testing of account balance may require calculation of figures. When judgement is involved we can evaluate reasons relating of judgement. The auditor can check formula and calculations relating to provision for bad debts.

Scanning or checking of accounting record to identify any unusual or doubtful items likely to contain material error. It may include unusual amount, altered, erased or unauthorized items. The auditor can review cash receipt and payments, suspense account for unusual discount and sales taxes on sale.

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