According to the ISA glossary on definition of terms, the following terms are defined as:-
(i) Tests of Control: – These are tests performed to obtain audit evidence about the effectiveness of the: –
a. Design of the accounting and internal control systems that is, whether they are suitably designed to prevent or detect and correct material misstatements.
b. Operation of the internal controls throughout the period.
Tests of controls therefore aim at determining whether the identified controls have operated effectively as designed throughout the financial period and can be relied upon to reduce the extent of substantive testing.
(ii) Substantive procedures refer to tests performed to test the management assertions made in the preparation of financial statements. They are of two types: –
a. Tests of detail of transactions and balances
b. Analytical procedures
These procedures seek to provide audit evidence as to financial statement assertions such as completeness, existence, valuations, occurrence, measurement, rights and obligations and presentation and disclosure.