Using MMs diagram of services (Diagram 1), complete the Audit Testing Matrix provided in Table 1. The account and transaction are presented in Column 1, the risk of material misstatement or what could go wrong is presented in Column 2, and MMs internal control is presented in Column 4. Specifically, for each risk, identify the relevant management assertion (Column 3), a test of control (Column 5) and substantive procedures [both substantive analytical procedures (Column 6), and tests of details (Column 7)] that address the assertion. Please note that you are completing the Audit Testing Matrix for each transaction (Transactions 1, 2, 3, and 4). The first transaction, assertion, and audit tests have been provided as an example.

As noted in AICPA AU-C 520.05, substantive analytical procedures involve comparing recorded amounts, or ratios developed from recorded amounts, to expectations developed by the auditor. The analytical procedures can range from simple comparisons (e.g., period-over-period comparisons) to more complex models involving many elements of financial and/or nonfinancial data. In designing the substantive analytic procedures, please review AICPA AU-C 520.05 (including 520.A2 to 520.A4 and 520.A21 to 520.A23), which provides sources of information and levels of disaggregation for your audit team to consider when designing the analytical procedure test. Describe your general expectation for the results of the analytical procedure and link your reasoning to evidence from the case (e.g., consider the opportunities and risks that MM faces). You can access AU-C 520 at the following link: