Compliance Testing and Substantive Testing in Audits

Compliance testSubstantive test
Determines controls are being applied that complies with management policies and procedures.Determines the integrity of actual processing.
In compliance testing we gather evidence with the objective of testing an organization's compliance with control proceduresSubstantive procedures are tests designed to obtain evidence to ensure the completeness, accuracy and validity of the data.
Compliance testing checks for the presence of controlsSubstantive testing checks the integrity of contents.
Ex: Verification of Assess rights controls, Presence of procedures for Program Change control management, incident management, problem management, review of existing network controls Review of transactions/numbers/values. Eg: Inventory validation, record matching, balance checks
Compliance testing will be performed firstSubstantive testing is always performed after compliance testing
Compliance testing is independent of Substantive testingHowever, the results of compliance testing are used to determine if Substantive testing is required
if compliance testing indicates strong internal control, substantive testing may be waived off or reducedIn case compliance testing indicates weak internal controls then substantive testing to be more rigorous

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