Describe the five types of audit tests. Identify which of the five types are substantive tests, and which are used to reduce assessed control risk.

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Describe the five types of audit tests. Identify which of the five types are substantive tests, and which are used to reduce assessed control risk.


Answer:
The five types of audit tests used to determine whether financial statements are fairly stated are: procedures to obtain an understanding of internal control, tests of controls, substantive tests of transactions, analytical procedures, and tests of details of balances. Substantive tests of transactions, analytical procedures, and tests of details of balances are substantive tests, whereas procedures to obtain an understanding of internal control and tests of controls are used to reduce assessed control risk.

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