Many audits involve testing both controls and substantive procedures. But in NFPs, charities, and small entity audits, controls are often weak, undocumented, or simply not cost-effective to test.
In these environments, auditors must adopt a fully substantive approach – and doing so effectively is often challenging.
This session offers clear guidance on when a substantive-only approach is appropriate and how to execute it effectively.
This session will cover:
- The unique risks of NFPs and smaller audit environments
- Why control testing may be ineffective
- Key requirements under ASA/ISA 315 Identifying and Assessing Risks of Material Misstatement, including the role of scalability
- A refresher on audit assertions and audit evidence
- Rules for a “substantive procedures only” approach under ASA/ISA 330 The Auditor’s Responses to Assessed Risks
- Designing effective substantive analytical procedures
- Substantive procedures across revenue, payments, payroll, bank, journals, and disclosures
- Targeted fraud testing, and
- Documentation.
