In carrying out an audit, the auditor appraises and tests the system of internal
control in order to ascertain that it is capable of processing transactions or
determining quantities and values completely and accurately. The auditor
further carries out substantive tests in an attempt to ensure that the transactions,
assets and liabilities recorded in the accounting records upon which the figures in
the financial statements are based, are completely and accurately recorded.
Required:
List and briefly explain the substantive tests the auditor would carry out to verify
the values attributed to:
(i) Trade debtors in a company’s financial statements. (6
marks)
(ii) Trade creditors in a company’s financial statements. (6 marks)