{"id":931,"date":"2020-04-02T14:45:24","date_gmt":"2020-04-02T14:45:24","guid":{"rendered":"https:\/\/alminawi.com\/?p=931"},"modified":"2025-12-07T18:21:09","modified_gmt":"2025-12-07T18:21:09","slug":"tts-series-e-internal-audit-evaluation-conclusion-techniques-episode-04-substantive-testing","status":"publish","type":"post","link":"https:\/\/e.americanpro.org\/?p=931","title":{"rendered":"SKU.4014_Internal Audit, Evaluation & Conclusion Techniques, Substantive Testing"},"content":{"rendered":"

Food for Thought:\u00a0<\/strong>Substantive testing is a core audit technique that verifies the accuracy and integrity of financial and operational records by directly examining transactions, balances, or disclosures. Unlike compliance testing, which checks whether procedures are followed, substantive testing confirms whether what\u2019s reported is actually correct<\/em>. This technique is essential during the evaluation and conclusion phase of the audit, particularly when material misstatements are a risk.<\/p>\n

Substantive testing involves recalculations, confirmations, document inspections, and analytical reviews. Internal auditors typically sample data and test for accuracy, completeness, and validity.<\/p>\n

Tool: SKU.4014_Internal Audit, Evaluation & Conclusion Techniques, Substantive Testing<\/strong><\/a><\/p>\n

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Fictitious Dataset for Substantive Testing<\/strong>
Let\u2019s assume ACME Corp. has a ledger of vendor expense transactions. Internal Auditor Auren wants to test if the amounts recorded in the general ledger match supporting invoices and receipts. Here\u2019s a simplified dataset for five sample transactions:<\/p>\n

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\n\n\n\n\n\n\n\n\n\n
Transaction ID<\/th>\nVendor<\/th>\nInvoice Amount<\/th>\nRecorded Amount<\/th>\nSupporting Doc<\/th>\nException?<\/th>\n<\/tr>\n<\/thead>\n
1001<\/td>\nOfficePro Supplies<\/td>\n$1,200.00<\/td>\n$1,200.00<\/td>\nYes<\/td>\nNo<\/td>\n<\/tr>\n
1002<\/td>\nLogiTrans Freight<\/td>\n$2,450.00<\/td>\n$2,450.00<\/td>\nYes<\/td>\nNo<\/td>\n<\/tr>\n
1003<\/td>\nDelta Stationers<\/td>\n$980.00<\/td>\n$1,020.00<\/td>\nYes<\/td>\nYes<\/td>\n<\/tr>\n
1004<\/td>\nBrightTech IT<\/td>\n$3,250.00<\/td>\n$3,250.00<\/td>\nYes<\/td>\nNo<\/td>\n<\/tr>\n
1005<\/td>\nEcoClean Services<\/td>\n$875.00<\/td>\n$875.00<\/td>\nNo<\/td>\nYes<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
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<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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Tool: Substantive Testing Matrix (Excel-based)<\/strong>
A structured Excel template helps document each test case with these fields:<\/p>\n