The auditor tests controls when planning to rely on them or when substantive procedures alone cannot provide sufficient evidence. For example, whether purchase orders are approved by authorised persons is tested on a sample basis.
If controls operate effectively, the extent of substantive work can be reduced, cutting the time and cost of the audit.
Source: BDS 330
Related terms
Internal controlProcesses and controls designed by management to provide reasonable assurance regarding the effectiveness of operations, the reliability of financial reporting and compliance with laws and regulations.Substantive proceduresTests of details and analytical procedures performed on account balances, transactions and disclosures to detect material misstatements in the financial statements.IT general controlsControls over access management, change management, IT operations and system development that ensure information systems operate reliably.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.
Last updated: October 22, 2026 · This definition is for general information only.