What are the different types of audit tests?

Financial audit is a review of the company's financial statement and other data to ensure their accuracy and validity. The auditors use various audit tests to analyze and demonstrate their client's financial information. Two types of roofing tests include analytical procedures and material tests of detail. Another audit test focuses on internal inspections, which are the procedures that the company uses to protect its information from fraud and abuse. Each group of audit tests includes a specific set of tasks or activities aimed at detecting irregularities.

Analytical procedures include comparison, financial conditions and review information about the source. The comparison takes two sets of information - one of the current period and the other of the previous period - and determines whether the current information is grossly different from the second period. The auditors can also look at budgets, predictions or other predictive information to determine whether they differ significantly than the previous periods. Source reviewH documents allow the auditor to check paperwork for different transactions from many different customers. Audit tests that include strong use of substantial procedures are often more subjective because the tests rely on the auditor's interpretation.

Audit tests also include essential detail tests. These procedures are of mathematical nature and try to remove subjectivity from the audit process. Auditors usually select a sample dose of transactions from various accounting information. The use of ratios and conversion allows auditors to determine whether the company operates near other companies in this industry. Significant operating differences found in these audit tests may indicate the need for further review.

The main tests of the audit detail may also include the collection of information from the client's suppliers and customers. Auditors ask these groups to declare a company owed by a company orof the company. The purpose of this test is to document whether the company maintains accurate accounting records. The shortcomings in this test require a second sample so that the auditors can determine how ubiquity is a problem in society. Documentation on these errors will eliminate the auditor's subjectivity because the information proves accounting errors.

Internal control testing is often the last set of audit tests completed auditors. The review of internal inspections begins with the interview with the management team and the company's employees. Audit tests then require internal control procedures to see if the statement coincides with the policy. The auditors then test internal checks by checking the information prepared directly below them. These tests may also include observation of employees working under controls.