Timothy Steele, a recent college graduate and new audit staff member, is having lunch with Michael Watts, an audit senior. Both are working on the audit engagement of a retailer that has operations in North America and Europe. Timothy has another question for Michael: "In my reading I have seen a number of examples of audit data analytics. However, I am having a difficult time distinguishing between ADA as a risk assessment procedure and ADA as a substantive test." Can you explain the difference to me and illustrate with a practical example?"

Answer Timothy's questions. Explain the difference between ADA as a risk assessment procedure and ADA as a substantive test. Illustrate your explanation with practical illustrations.