Chan & Partners Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Australia. During the 2017 year, Chan & Partners gained a new client, Medical Services Holdings Group (MSHG), which owns 100 per cent of the following entities:

• Shady Oaks Hospital, a private hospital group
• Gardens Nursing Home Pty Ltd, a private nursing home
• Total Cancer Specialists Limited (TCSL), a private oncology clinic that specializes in the treatment of cancer.

Year-end for all MSHG entities is 30 June.

During the 2017 financial year, Shady Oaks released its own range of medical supplies such as bandages and first aid kits, which are sold via direct marketing by a sales team employed by the hospital. The sales team are remunerated via a base salary and a bonus component which is based upon the dollar value of sales they generate. You recognise that their main motivation is to maximise their bonuses. You select a sample of payments received by the hospital post year-end and trace back to the general ledger and customer account balance.

In addition, you are reviewing the results of a number of tests in relation to accounts payable at Gardens Nursing Home, as follows.

For each of the test results for Gardens Nursing Home:

(a)Identify whether this is a test of controls or a substantive test of detail.

(b)Determine the key assertion addressed by the test procedure.