I just wanted help and to see if there were any other thoughts on the substantive testing procedures and internal control testing. My answers seem like they are too redundant. This is what I have so far down below, I also wanted to be sure that my answer for Difference Between Substantive Testing and Internal Control Testing is correct. Thanks!

Difference Between Substantive Testing and Internal Control Testing:

Substantive testing examines errors in financial records and is done in accordance with GAAS. The overall goal is to provide reasonable assurance on the accuracy of financial documents while recording any material misstatements or errors. The three tests include analytical procedures, test of details of transactions, and tests of details of balances. (Riskoptics, 2023)

Internal control testing verify that internal controls prevent or uncover any material misstatements at the appropriate assertion level. Internal controls also ensure that a company's a policy is well-designed and use to stop or uncover any significant misstatements in the company's financial statements . The overall goal is to assess the performance of the internal control system to help enhance a company's financial reporting, its operations, and its compliance. These tests include a concurrent test and a planned test of control. (Riskoptics, 2023)

Tests and Internal Controls (my answers so far)

Financial Statement Area

Test: Substantive Procedures to be Tested

Key Internal Control

Long-Term Debt Obligations

An auditor could perform debt walkthroughs or even verify any new leases for the company and examine any debt fraud. (Hall, 2023)

Be sure only authorized and qualified staff are approving new leases or borrowed money. (Hall, 2023)

Accounts PayableAuditor could perform payables and expense walkthroughs and examine budget and expense reports, payable ledgers, and determine who authorizes the expenses (Hall, 2023)Ensure that there is a segregation of duties such as approving any purchases, paying off and recording any payables and even reconciling any bank statements (Hall, 2023)

Inventory

Counting Inventory - An auditor could visually witness the inventory being counted and could verify any inventory statement discrepanciesBe sure that only appropriate staff members have access to inventory, keep a login sheet for staff members who check the inventory or place cameras near inventory to prevent theft

Accounts Receivable

The auditor could examine the accounts receivable and trace any of the amounts over in the general ledger. Other tests could include examining any cash receipts or matching together any invoices to their shipping log. (Accountingtools.com, 2022)

Only allow authorized staff to have access to any billing software, proofread and closely examine any contract terms. (Accountingtools.com, 2022)Cash

Auditor could examine bank statements for accuracy and be sure that any bank accounts are recorded in the general ledger. (Hall, 2023)

Take steps to minimize theft (properly store cash, camera installation, authorized staff only) and ensure a second person reviews bank reconciliations. . (Hall, 2023)Fixed AssetsAuditor could verify any asset records and specifically examine the type of asset, the location of the asset, description, purchase price, date purchased, etc. (Coastal Capital, 2023)Ensure that accurate assets records are kept and that only authorized staff have access. Ensure proper depreciation is recorded as well for the asset. (Coastal Capital, 2023)