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    PracticeCPA®CPA AUD Practice Exam 5Question 72
    Hard1 markMultiple Choice
    Area III: ProceduresAUDProceduresSubstantive Testing

    CPA · Question 72 · Area III: Procedures

    Which of the following is a 'substantive procedure'?

    Answer options:

    A.

    Inspecting evidence of authorization on purchase orders.

    B.

    Observing the segregation of duties in the mailroom.

    C.

    Confirming account balances with customers.

    D.

    Reviewing the entity's flowchart of the sales cycle.

    How to approach this question

    Substantive = $, Numbers, Balances. Control = Process, Authorization, Signatures.

    Full Answer

    C.Confirming account balances with customers.✓ Correct
    Substantive procedures are designed to detect material misstatements at the assertion level (dollar errors). Confirmation of balances directly tests the dollar amount (Existence/Valuation). The other options test the internal control process.

    Common mistakes

    Confusing Tests of Controls with Substantive Tests.
    Question 71All questionsQuestion 73

    Practice the full CPA AUD Practice Exam 5

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