[LIZZ]

NINJA Question –

Quick question about the “TRACE” mnemonic for Substantive Procedures.

C – stands for Confirm (test of controls). But you don’t Test Internal Controls as a substantive procedure. Maybe I’m reading into this.

I even looked in the Ninja Text to get some clarity but I did not find anything.

Can someone explain the “C” to me?

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[CageTheCPA]

You're gathering evidence on a particular assertion or balance and not internal controls themselves. So, for example, was a JE to DR: inventory and CR: Accrued Liabilities approved before it posted to the GL? The auditor might get a screenshot of the JE approval as evidence, or sit with the accountant to observe them enter and submit a JE for approval.

[LIZZ]

ok I think I get it.. Same IRON tests but used as evidence to support assertions about Transactions Balances and Disclosures.

THANK YOU!

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[Author]

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