Audit Evidence:Depth Test & Its Purposes

September 26th, 2008 Comments off
Share |

Append below is some salient points on Depth Test and its objective(s):- 

Depth Test

  • Sometimes also known as “cradle-to-grave” tests
  • Its involves taking a transaction or a number of transactions and following them through the accounting system from start to finish or vice versa

Purposes/Objectives

  • Generally, depth test is to provide audit evidence to assist the auditor in arriving at his opinion
  • There are also some specific purposes of using depth test:
  • To confirm the accuracy of his client’s accounting system. Also refer to as “walk-through checks” Such a depth test is likely to involve only a small number of transactions
  • To perform compliance test. The auditor may use a number of transactions, testing the control in depth at each stage. Such tests will provide him with evidence as to whether or not he may rely upon that control in planning later audit work
  •  To provide evidence of a substantive nature. He may use such principles to check that transactions have been properly recorded in the accounting records or in the financial statements.

 

 

 

Comments are closed now.

Financial Accounting

 
 

Advertise Here | Brain Teasers/Puzzles | Greeting Cards | Inspirational Quotes | Jokes/Humor | Useful Links | Motivational Stories | Resource | Shopping | Share/Express Your Views | Testimonials | Universities/Colleges | Words of Wisdom from Religions | FREE POSTING OF ACCOUNTING & FINANCE JOBS VACANCY|