What is the test of details performed by auditor?

Test of details refers to tests/procedures performed by auditor to obtain sufficient and appropriate audit evidence on different items of financial statement. These items include account balances, transactions, disclosures, and other information given in a set of financial statement.

Generally, there are two ways in which auditors might have confidence in the audit evidence. The first way is to evaluate a client’s controls. In simple words, auditors construct tests of controls to assess the effectiveness of a client’s systems for preventing or identifying fraudulent claims. Similarly, the controls test examines the client’s post-discovery correction of any mistakes. Auditors analyze the effectiveness of a client’s internal controls via control testing, often known as a test of controls. A variety of auditing approaches may be applied to test controls.

The second way is to perform substantive processes as a resource for obtaining audit evidence. To identify substantial falsification of a client’s claims, substantive techniques are created. In this way, it differs from the control group test. Auditors may choose between a “test of details” and an “analytical approach,” both of which fall under the term “substantive processes.” These two objects differ greatly from one another.

Also read, steps to perform external audit.

Test of Details

Auditors undertake a “details test” to check the complexities of certain transactions or balances. Auditors search for proof of the transactions and balances used to create the financial statements during testing. To ensure the accuracy of a company’s accounting, auditors often choose a random sample of transactions or balances to examine.

International Standard on Auditing 330

According to “ISA 330 – The Auditor’s Responses to Assessed Risks,” it is the auditor’s responsibility to decide whether major analytical methods alone will decrease audit risk to an acceptable level. Similarly, auditors may use detail-oriented tests if they believe it essential, but only if doing so reduces audit risk. Auditors must thus use discretion when deciding whether to undertake a test of detail or a test of substance. The standard also authorizes auditors to use a hybrid approach that combines the two. Auditors use both analytical procedures and inspection tests in practice.

However, the ISA neither specifies particular tests nor provides guidelines on how to conduct them. This is because there are no globally applicable rules for judging more delicate matters. Both information about the consumer and the assessed products are essential in this instance. Different audit jobs and financial statement lines will thus be subjected to varying degrees of scrutiny.

Audit procedures for Test of Details

As previously stated, the approaches used to conduct detail-oriented tests may differ depending on the client. During detail inspections, however, auditors use the following techniques:

1-Providing Evidence by Vouching

The vouching technique is an essential stage in examining the particulars of an audit system. Vouching is the practice of comparing the financial records of a business with its source papers to verify their legitimacy. For instance, an auditor may certify the accuracy of a sales invoice by comparing it to the transaction’s specifics. The purpose of vouching is to verify that the /accounting system accurately reflects the original document.


Auditors must first choose a transaction to attest to before examining the supporting papers. Auditors will choose a document as the beginning point for tracing and then trace that document through the accounting system to the financial statements. Auditors will choose a subset of source documents and use the document identification numbers to authenticate their existence in the company’s accounting system. For example, to transmit to the client’s purchase ledger and financial statements, a sample of purchase invoices may be selected.

Also read, vouching vs. tracing

3- Bank confirmation

As part of their review of particulars, auditors often undertake circularization, also known as confirmations. To check the client’s accounting, the auditor sends confirmations to several third parties. Financial institutions, borrowers, and creditors may participate. The same holds for confirmations, one of the most prevalent and reliable pieces of audit evidence. Auditors may utilize confirmations to seek more information from the parties. Auditors use bank confirmations for several reasons, including verifying the existence of a loan or spending account.

Conclusion on test of details

Auditors use a variety of techniques to collect the necessary audit evidence to conduct an audit. Auditors may get this information in two ways: by testing controls or by using substantive processes. The auditor will conduct a test of details, which is a subset of substantive processes necessary to verify particular aspects of each transaction. To verify information, accountants may use a variety of methods, such as vouching, tracing, confirmations, contract review, etc. In addition, analytical approaches vary from the investigation of minute features. To determine the proper course of action, auditors must examine both the client’s and the audit’s related risks.

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