Substantive Audit Testing: Definition, Explanation, and Example


Substantive testing or substantive procedure is the technique used by the auditor to obtain the audit evidence in order to support the auditor’s opinion.

Substantive testing is part of the substantive audit approach and is performed at the execution stage of the audit.

It is different from to test of control. The number of samples in substantive testing is depending on many factors. For example, the audit approach that is considered by the audit manager or partner whether they decided to use a systematic approach, a substantive audit approach, or else.

Normally, if the audit approach to be used is substantive, then the volume of samples to be reviewed is higher than a systematic approach.

It is different from the control test. In control testing, the auditor wants to assess the internal control designed and implemented by the auditor especially the internal control over financial reporting.

Substantive testing is sometimes called detail testing where the main objective is to verify the balances, transactions, and disclosures of financial statements.

The auditor could not use the result of the test of control to make the conclusion that the financial statements are true and fair view. The result of the test of control could only conclude the internal control context.

Principally, substantive testing is to confirm the following financial assertion:

Financial Assertions:

  • Verified existence,
  • Confirmed rights and obligations,
  • Check validity,
  • Verified completeness.
  • Check occurrence
  • Check completeness,
  • Confirmed accuracy,
  • Verified authorization,
  • test cut-off,
  • check classification.


As mentioned above, the substantive audit procedures are performed at the execution stage after auditors prepared audit planning.

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After the audit performs an understanding of the client’s internal control, and test of control, then auditors will assess whether they can rely on the control or not.

If auditors could rely on it, then there are fewer works to do in substantive testing. But, the auditor concluded that the control could not rely on it.

Then, testing might be up to 100%.

Normally, auditor designed their testing based on the samples selected and then verify with the supporting document.

Sampling will follow the guidance from the international standard on auditing.

The testing will be different from the balance sheet items and income statement items. Normally, if both of these items are correct, then the items in the statement of change in equity, and statement of cash flow are also correct.

Substantive Audit Testing Flow Chart:

Substantive Testing

Now to give you a clear overview of what is the substantive test, let see the example below:


Let’s start with the substantive test of revenue.

For example, you are an auditor and your senior gives you the revenue cycle for testing. And you will have some questions about what should you do in control testing and what should you do in substantive testing.

Basically, you will have to start with the control test by testing all significant controls or key control related to the revenues.

This testing is just to confirm whether the control over the revenue cycle is working or not. It is not to confirm whether the revenue transactions, amount, and classification are correct.

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Two things are different right?

Now once you performed and concluded that the control over the revenue cycle is working properly, then it is time to consider substantive testing.

The substantive testing here is to confirm whether the revenue recorded in the income statement is correct or not. I said correct or not here is just to give you the simple words. In revenue testing, you might confirm many areas like:

  • Testing to confirm cut off
  • Confirm the total amount (total sales amount or revenue) by vouching and analytical review with the cost of sales or inventories.
  • Customers confirmation ( AR confirmation)
  • Check revenue recognition
  • And so on.

Written by Sinra