Difference b/w ap and sap

Substantive implies that you do "manual" checking, if you are going to do just analytical procedures you can get away with variance analysis, etc. However, substantive means you are going to review actual documents, check the existence of the assets, etc. Hope this anwers your question. If you need a more detailed explanation please feel free to send me a quick note.

As per wikipedia: Substantive procedures (or substantive tests) are those activities performed by the auditor to detect material misstatement at the assertion level.

The different assertions of balances are completeness, existence, rights + obligations and valuation + allocation, those for transactions are occurrence (validity), completeness, accuracy, cut-off and classification.

Management implicitly assert that account balances and underlying classes of transaction do not contain any material misstatements: in other words, that they are materially complete, valid and accurate. Auditors gather evidence about these assertions by undertaking activities referred to as substantive procedures.

Examples

For example, an auditor may: physically examine inventory as evidence that inventory shown in the accounting records actually exists (existence assertion); inspect supporting documents like invoices to confirm that sales did occur (occurrence); arrange for suppliers to confirm in writing the details of the amount owing at balance date as evidence that accounts payable is a liability (rights and obligation assertion); and make inquires of management about the collectibility of customers' accounts as evidence that trade debtors are accurate as to its valuation. Evidence that an account balance or class of transaction is not complete, valid or accurate is evidence of a substantive misstatement but only becomes a material misstatement when it is large enough that it can be expected to influence the decisions of the users of the financial statements.

Types of procedures

There are two categories of substantive procedures - analytical procedures and tests of detail. Analytical procedures generally provide less reliable evidence than the tests of detail.[citation needed] Note also that analytical procedures are applied in several different audit stages, whereas tests of detail are only applied in the substantive testing stage

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