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3 types of audit procedures.

Auditors design detailed audit procedures to obtain sufficient appropriate audit evidence. Procedures can include inspection, observation, confirmation, recalculation, re performance, and analytical procedures, often in some combination.

The following are three types of audit procedures:

Risk assessment procedures

Risk assessment procedures are procedures to obtain an understanding of the entity and its Internal control to assess the risk of material misstatement at the financial statement level and at assertion level. Risk assessment procedures are required in all audits and for all material areas.

Test of control

Objective of test of control is to confirm the operating effectiveness of internal control in preventing, detecting and correcting misstatements at assertion level. Tests of controls are required only if auditor assess that the controls are operating effectively, and he plans to rely on internal controls in his risk assessment.

Substantive procedures

Objective of substantive procedures is to detect misstatement in the financial statements at the assertion level, these include Analytical procedures and Test of details. Substantive procedures are required in all audit and for all material areas. However, their extent depends on the risk of material misstatements.

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