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Substantive testing



Substantive testing

We’ve been evaluating new credit card rules for a number of months now. We’ve analyzed the rules, and we’ve analyzed the consequences. We’ve been studying the data. We’ve been looking at the facts. It’s time to bring our findings to you. That’s why we’re releasing this blog. In this post, we explain the testing process and how it contributes to the results you see in our ratings. It will also explain what we’re looking for, and how we interpret the numbers.

The finance industry does not have a great track record when it comes to stock picking, and many of its biggest mistakes are due to lack of rigor in testing the investment thesis. The idea is to test the company’s financial statements, the management team, their competitive advantages, their industry, and whether they will be able to sustain their competitive advantage over the coming years. The fundamental problem is that most companies do not provide detailed financial statements, and even if they do, the accounting rules and regulations are not always consistent across industries. Even if the numbers are consistent, they do not always tell the full story.

Home » Bookkeeping » Substantive testing

Oct 16, 2020
Bookkeeping by Adam Hill

External audits, therefore, allow stakeholders to make better, more informed decisions related to the company being audited. Which statement best describes the interaction of the systems and substantive approaches in the audit plan? A) The systems approach focuses on testing controls to make sure they are effective, while the substantive approach is the detailed testing of specific accounts for accuracy.

No matter how strong internal controls over financial reporting are, the auditor could not rely 100% on those internal controls by ignoring substantive tests. For our company with $500,000, the cash ledger may report that $5,000 is kept onsite for petty cash and customer receipts, $245,000 is kept at ABC Bank in a checking account, and $250,000 is kept at XYZ Bank in a savings account. The final step is simply counting the cash in the petty cash safe and then calling the bank to get account statements for the date of the financial reports. If the bank statement reports the same amount as the cash ledger, then the conclusion is that the cash account is complete and correct.

Prepare a rough draft of the financial statements and of the auditors’ report. Tour the client’s facilities and review the general records.

The results of the internal audit are used to make managerial changes and improvements to internal controls. The purpose of an internal audit is to ensure compliance with laws and regulations and to help maintain accurate and timely financial reporting and data collection. It also provides a benefit to management by identifying flaws in internal control or financial reporting prior to its review by external auditors. External audits can include a review of both financial statements and a company’s internal controls. Which of the following is the most likely first step the auditors would perform at the beginning of an initial audit engagement?

Consult with and review the work of the predecessor auditors prior to discussing the engagement with the client management. Which of the following is least likely to be considered a risk assessment procedure in a financial statement audit? Which of the following statements is not correct regarding the auditor’s determination of materiality? It is the smallest amount of misstatement that would probably influence the judgment of a reasonable person relying upon the financial statements. Auditing standards require auditors to consider materiality in planning the audit.

For example, let’s consider a kiosk in the mall that sells smartphone cases. They might report on their financial statements that they have $30,000 in inventory. To confirm that, the auditor would look at the inventory records and ensure that the value of each item was accurate and that the quantity and value of all the different products added up to $30,000. They might even select a sample of products and physically count the products to ensure the inventory ledger agrees with the actual physical count.

If the financial statements say that a company has $500,000 in the bank, the auditors want evidence that there is actually $500,000 in the bank. First, they obtain the final version of the balance sheet and look at the amount of cash the company reports. Second, they research the cash ledger and identify where that cash is located. The combination of inherent risk and control risk determines the level of detection risk the auditor is willing to accept and to still be able to conclude that the financial report is materially correct. Detection risk is reduced or increased in direct proportion to the amount of substantive testing performed.

Compliance and Substantive Procedures

What is the difference between audit procedures and substantive procedures?

There are two categories of substantive procedures – analytical procedures and tests of detail.

For this reason, substantive analytical procedures alone are not well suited to detecting fraud. External auditors follow a set of standards different from that of the company or organization hiring them to do the work. The biggest difference between an internal and external audit is the concept of independence of the external auditor. Auditing is a profession that lives by the adage ‘Trust, but verify.’ Auditors verify by performing substantive tests to obtain documented evidence that supports some assessment or conclusion about some aspect of an organization. Examples of common substantive procedures that auditors routinely perform are bank confirmations, account reconciliations, and document matching.

Substantive Tests

The planning level of materiality will normally be the larger of the amount considered for the balance sheet versus the income statement. The appropriate financial statement base for computing materiality may vary based on the nature of the client’s business. Substantive procedures are used during an audit to test for a material misstatement of the financial statements.

Types of procedures

  • When designing substantive analytical procedures, the auditor also should evaluate the risk of management override of controls.
  • For some assertions, analytical procedures are effective in providing the appropriate level of assurance.

Another substantive procedure performed by auditors is document matching. This is simply obtaining two documents from two different, independent sources and making sure they match, or agree, with one another. This is a common procedure for auditing accounts receivable (A/R). An accounts receivable balance means the company is saying that customers owe them money.

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If they do, they can then look for payments made by the customer. After accounting for any payments, the balance should be the same as reported in the A/R ledger.

Audits performed by outside parties can be extremely helpful in removing any bias in reviewing the state of a company’s financials. Financial audits seek to identify if there are any material misstatements in the financial statements. An unqualified, or clean, auditor’s opinion provides financial statement users with confidence that the financials are both accurate and complete.

If sufficient appropriate audit evidence cannot be obtained, or the evidence points to a material misstatement in the FS, the auditor will have to issue a modified audit opinion. In this situation, auditors will decide not to test the key controls and they jump to a substantive test. Because control over financial reporting is not reliable, to minimize the risks of material misstatements, auditors need to have a large sample size and it could be reached to 100%. Substantive procedures (or substantive tests) are those activities performed by the auditor to detect material misstatement or fraud at the assertion level. Account reconciliations are substantive procedures that require the auditor to trace the components of one account to some source documentation.

The auditor saves the copies of the bank statements, the cash ledger, the financial statements, and their cash count sheet as evidence of their conclusion. Most of the work auditors do is aimed at conducting substantive procedures. If you’ve ever worked at an organization that has been audited by external or internal auditors, you likely remember the requests for documentation, reports, and other original information.

For some assertions, analytical procedures are effective in providing the appropriate level of assurance. For other assertions, however, analytical procedures may not be as effective or efficient as tests of details in providing the desired level of assurance. When designing substantive analytical procedures, the auditor also should evaluate the risk of management override of controls. As part of this process, the auditor should evaluate whether such an override might have allowed adjustments outside of the normal period-end financial reporting process to have been made to the financial statements. Such adjustments might have resulted in artificial changes to the financial statement relationships being analyzed, causing the auditor to draw erroneous conclusions.

B) The systems approach focuses on detailed testing of specific accounts for accuracy, while the substantive approach is the testing controls to make sure they are effective. C) The systems approach focuses on the use of computer systems to aid in the audit while the substantive approach focuses on more manual tests. D) A thoroughly designed systems approach to auditing can eliminate the need for any substantive procedures.

The timing of substantive procedures is most flexible when controls have been tested and assessed as effective, and can be performed up to six months before year-end. When controls are not tested or are not assessed as effective, the timing of substantive procedures is at or near year-end.

What are the two types of substantive procedures?

A substantive procedure is a process, step, or test that creates conclusive evidence regarding the completeness, existence, disclosure, rights, or valuation (the five audit assertions) of assets and/or accounts on the financial statements.

To qualify as a substantive procedure, enough documentation must be collected so that another competent auditor could conduct the same procedure on the same documents and make the same conclusion. The auditor’s report contains the auditor’s opinion on whether a company’s financial statements comply with accounting standards.


To test for that, the auditor would look at the A/R ledger and select a customer account. They would look at the balance for that account, and then find the customer’s order and company’s invoice. Those are two different documents from two different sources that should match.{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”What are the three types of substantive tests?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” A. True-false B. Multiple choice C. Short answer A. True-false”}},{“@type”:”Question”,”name”:”What is test of control and substantive test?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” The test of control and substantive test is a legal standard that determines whether a person has the right to enter or remain in a property. The test of control and substantive test is used to determine whether an individual has the right to enter or remain on private property.”}},{“@type”:”Question”,”name”:”What are some examples of substantive tests?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:” Some examples of substantive tests are: – A test to determine if a person is legally blind. – A test to determine if a person has the ability to drive. – A test to determine if a person is eligible for Social Security benefits. – A test to determine if a person has the ability to work. – A test to determine if a person is eligible for public assistance. – A test to determine if a person is eligible for a loan. – A test to determine if a person is eligible for public housing. – A test to determine if a person has the ability to vote. – A test to determine if a person is eligible for a job.”}}]}

Frequently Asked Questions

What are the three types of substantive tests?

A. True-false B. Multiple choice C. Short answer A. True-false

What is test of control and substantive test?

The test of control and substantive test is a legal standard that determines whether a person has the right to enter or remain in a property. The test of control and substantive test is used to determine whether an individual has the right to enter or remain on private property.

What are some examples of substantive tests?

Some examples of substantive tests are: – A test to determine if a person is legally blind. – A test to determine if a person has the ability to drive. – A test to determine if a person is eligible for Social Security benefits. – A test to determine if a person has the ability to work. – A test to determine if a person is eligible for public assistance. – A test to determine if a person is eligible for a loan. – A test to determine if a person is eligible for public housing. – A test to determine if a person has the ability to vote. – A test to determine if a person is eligible for a job.

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Enchanted Woods and Forest Slots: Exploring the Mystical Realm of Nature




In the realm of online casino gaming, a genre taps into the enchanting allure of nature and woodland mysteries: Forest Slots and Enchanted Woods Slots. These slots transport players into the heart of lush forests, where mythical creatures, ancient trees, and hidden treasures await discovery – play it here.

In this article, we will delve into the captivating world of Forest Slots and Enchanted Woods Slots, exploring their captivating features, woodland themes, and their magical gaming experience.

Immersed in the Wonder of Nature with Forest Slots

Forest Slots and Enchanted Woods Slots represent a captivating subgenre within online slot games, drawing inspiration from forests’ lush beauty and mystical aura. They offer a fusion of natural aesthetics, woodland creatures, and the potential for substantial real-money rewards. These slots appeal to fans of nature and wildlife and players seeking an escape into a world of tranquility and enchantment.

Key Features of Forest Slots and Enchanted Woods Slots

Lush Woodland Aesthetics

The standout feature of Forest Slots and Enchanted Woods Slots is their ability to recreate the serene and mystical ambiance of the forest. These games often boast towering trees, moss-covered stones, and enchanting glades—the graphics and animations transport players to a world of natural wonders, creating an immersive gaming experience.

Iconic Forest Symbols

Forest Slots and Enchanted Woods Slots feature symbols emblematic of the woodland realm. Players can expect to encounter woodland creatures like deer and owls, ancient trees, magical toadstools, and the elusive fairies and sprites that inhabit these enchanted woods. These symbols add to the game’s visual allure and play a critical role in determining winning combinations and triggering bonus features.

Woodland Creatures and Mystical Beings

To enhance the forest experience, these slots often incorporate encounters with mythical creatures and mystical woodland beings. Players may interact with fairies, elves, unicorns, and other fantastical inhabitants of the enchanted woods. These interactions add an extra layer of enchantment and engagement to the gameplay, providing players with a sense of wonder and magic.


Forest Magic Bonus Rounds

In Forest Slots and Enchanted Woods Slots, players often engage in bonus rounds that tap into the mystical energies of the forest. These may involve participating in magical ceremonies, uncovering hidden pathways, or seeking the blessings of ancient forest guardians. These bonus rounds immerse players in the enchanting world of the forest, intensifying the gaming experience.

Themes in Forest Slots and Enchanted Woods Slots

These slots come in a variety of themes, each offering a different woodland adventure:

Fairy Glades

These slots focus on the magical realms inhabited by fairies and sprites, where players can explore glades, seek hidden treasures, and receive the blessings of forest spirits.

Mystical Creatures

In these games, players encounter mythical creatures like unicorns, centaurs, and magical creatures as they explore the forest’s depths in search of hidden wonders.

Ancient Trees and Guardians

These slots revolve around the wisdom and magic of ancient trees, where players seek out the guidance and blessings of these wise woodland sentinels.

Woodland Treasures

In these games, players embark on quests to discover hidden treasures and uncover the riches that lie within the heart of the enchanted woods.

Winning Real Money in Forest Slots and Enchanted Woods Slots

While the immersive themes and woodland aesthetics are the main attractions, players can also win real money while enjoying Forest Slots and Enchanted Woods Slots. These games offer various opportunities to form winning combinations, trigger bonus rounds, and accumulate substantial payouts, much like traditional slots.



Forest Slots and Enchanted Woods Slots offer a uniquely immersive experience within online casino gaming. Whether you’re a fan of magical glades, encounters with mystical creatures, seeking the wisdom of ancient trees, or embarking on quests for woodland treasures, there’s a Forest Slot or Enchanted Woods Slot that can transport you to the heart of nature’s mysteries. With enchanting visuals, iconic woodland symbols, and engaging gameplay, these slots provide a truly unforgettable gaming experience. So, step into the enchanted woods and let the magic of nature guide you on a journey of wonder and discovery!

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Acquiring Sweeps Coins in Sweeptastic for 2023





Sweeptastic is a newly launched sweepstakes casino that is currently in the early stages of establishing itself in the industry. Although there are areas, such as its game library and user interface, that are still undergoing refinement, the casino shows potential, particularly with its attractive welcome offer and continuous promotions. Despite a somewhat limited range of games, Sweptastic offers a decent entry point for players looking to explore the world of sweepstakes casinos.

Legitimacy of Sweeptastic Casino

Assessing the legitimacy of an online gaming site involves subjective judgment, but there are signs and factors that can help determine the intention behind a platform.

One important consideration is the transparency of the owner company, and in the case of Sweeptastic, this information is readily available on the casino’s site – Heuston Gaming Limited with registration number 104624.

Additionally, Sweeptastic has taken steps to enhance transparency and player safety. They provide a page displaying the Return to Player (RTP) of all available games and have a Responsible Gaming page that discusses how players can have the best gaming experience while maintaining control over their habits.

With these measures, including comprehensive information and tools for self-control, Sweeptastic demonstrates a commitment to ensuring the safety and well-being of its players.


Sweptastic has a straightforward system with two virtual currencies: Gold Coins and Sweepstakes Coins, also known as Lucky Coins.

Lucky Coins (Gold Coins)

In Sweptastic, Gold Coins go by the name Lucky Coins. These coins are exclusively for playing games for fun and hold no real-world value. While the casino generously provides them for free, you also have the option to purchase additional Lucky Coins. They serve as a useful tool for exploring games before committing your valuable Sweepstakes Coins.

Sweepstakes Coins

Critical to the sweepstakes casino experience, Sweepstakes Coins are the virtual currency that transforms your in-game winnings into real money. Sweptastic retains the original name, emphasizing that winnings in Sweepstakes Coins can be redeemed for actual cash. Notably, these coins cannot be bought; however, Sweeptastic offers them abundantly through various promotions or as a bonus when you purchase Lucky Coins.

Promotional Offers at Sweeptastic

Promotions at Sweeptastic are designed to set high standards, offering players ample opportunities to enjoy their favorite games and potentially win real money rewards without the need for any purchases. Let’s delve into the details of each promotional offer:

Signup Bonus

Sweeptastic stands out by providing one of the most generous free welcome bonuses in the sweepstakes casino realm – a whopping 27,777 Gold Coins + 10 Sweepstakes Coins.


At the same time, the full offer requires account verification; merely registering grants you an initial reward of 10,000 Lucky Coins (Gold Coins).

Daily Login

Acknowledging active members, Sweeptastic adopts the common practice of a Daily Login Bonus but distinguishes itself with a substantial amount of freebies. Simply log in each day, and the casino automatically boosts your balance with 1,000 Lucky Coins.

Happy Hours

For early birds, Sweeptastic introduces Happy Hours, generously gifting 3,000 Lucky Coins every morning between 7 am and 10 am. This bonus is seamlessly added to your account upon login, requiring no additional steps or claims.

First Purchase Offer

While Sweeptastic lavishes players with substantial free coins, the extensive gaming catalog may lead to their quick depletion. In anticipation of this, the social casino presents two exclusive offers for your initial coin purchase:

  • $17.49 pack – 25,000 LC + 25 SC (30% off)
  • $29.49 pack – 45,000 LC + 45 SC (35% off)

Purchase Methods

Now that you’re acquainted with Sweeptastic’s virtual coins let’s explore the options available if you decide to make a purchase on this casino-style gaming platform. Sweeptastic offers six predefined Lucky Coin bundles, each accompanied by complimentary Sweepstakes Coins. You can make purchases using widely accepted bank cards like Visa, Mastercard, and American Express, among others. Additionally, popular online payment providers are supported, ensuring a seamless transaction experience based on our testing.

Redeeming Prizes

For many players, the most exciting aspect is whether Sweptastic truly pays out real cash prizes. The answer is a resounding yes, and the redemption process is notably faster compared to other sweepstakes casinos. You have various redemption options, including bank transfers, gift cards, and even merchandise if you prefer tangible rewards.


It’s crucial to note that to complete the redemption process; you must verify your account through KYC (providing documents for identity, address, phone, and bank account verification), wager the Sweepstakes Coins at least once (as they are received as a bonus), and have a Sweepstakes Coins balance equivalent to at least $100.


Since its inception, Sweeptastic has set the standard for how things should be done in the sweepstakes casino world. Whether it’s bonuses, games, or player care, this social casino brand truly stands out.

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Enhancing User Engagement And App Discovery: The Impact of User-Friendly Interfaces in App Catalogs




Mobile applications have become an integral part of our daily lives. From social networking to productivity tools, there is an app for everything. With millions of apps available across various platforms, app catalogs are crucial in helping users discover new applications. However, the success of these catalogs greatly depends on user experience, particularly the user-friendliness of their interfaces.

The Significance of User-Friendly Interfaces

User-friendly interfaces are essential elements of app catalogs as they directly influence how users interact with and explore the available apps. A well-designed and intuitive interface can significantly enhance the overall user experience. Here are some key factors that highlight the significance of user-friendly interfaces:

1.1 Navigational Ease

One of the primary benefits of a user-friendly interface is navigational ease. When users can easily browse through app categories, search for specific apps, and access relevant information, they are more likely to engage with the catalog for longer periods.

1.2 Visual Appeal

The visual appeal of an app catalog matters. An attractive and well-organized layout can captivate users and encourage them to explore further. A cluttered or confusing interface, on the other hand, can deter users from using the catalog.

1.3 User Feedback

User-friendly interfaces often include features for user feedback, such as ratings and reviews. This feedback helps users make informed decisions about which apps to download, enhancing their overall experience.

Comprehensive App Collection

APPiX360’s extensive app collection caters to a wide array of interests and needs. The platform regularly updates its offerings with the latest and most popular apps, ensuring users have access to the newest trends and tools. The importance of user reviews and ratings in aiding informed decisions is a testament to the platform’s user-centric approach. The platform’s commitment to ensuring safe downloads is exemplified through its stringent vetting process, which can be illustrated through the safe downloading of the Pin-up app.

Impact on User Engagement

User engagement is a crucial metric for app catalogs. It measures how actively users interact with the catalog, and user-friendly interfaces can have a profound impact on engagement levels:

2.1 Longer Time Spent

A user-friendly interface encourages users to explore more apps, leading to longer sessions within the catalog. When users find it easy to navigate, they are likely to spend more time searching for new apps and discovering content.

2.2 Higher Retention Rates

Apps with user-friendly interfaces tend to have higher retention rates. Users are more likely to return to the catalog regularly if they had a positive experience during their previous visits. This consistent engagement benefits both users and app developers.

2.3 Increased App Downloads

Improved user engagement often leads to an increase in app downloads. When users feel comfortable and confident while using the catalog, they are more likely to take the next step and download apps that pique their interest.


Impact on App Discovery

App discovery is a critical aspect of app catalogs, as it directly affects an app’s success. User-friendly interfaces play a significant role in enhancing the app discovery process:

3.1 Effective Search and Filtering

User-friendly catalogs offer efficient search and filtering options. Users can easily narrow down their choices based on categories, keywords, or ratings. This simplifies the app discovery process and helps users find relevant apps more quickly.

3.2 Personalized Recommendations

Many app catalogs use user data to provide personalized app recommendations. A user-friendly interface makes it easier for catalogs to collect and analyze user preferences, leading to more accurate and appealing app suggestions.

3.3 Social Integration

User-friendly interfaces often incorporate social features, such as sharing and following. These features enable users to discover apps recommended by their friends or influencers, fostering a sense of community within the catalog.


The Pin-Up App Download Experience

As we explore the impact of user-friendly interfaces, let’s take a closer look at the Pin-Up app download experience as an example. Pin-Up is an online casino and sports betting platform that offers a mobile app for users to enjoy their favorite games and place bets conveniently.

4.1 Navigational Simplicity

The Pin-Up app catalog boasts a user-friendly interface that simplifies the navigation process. Users can easily access different sections of the app, such as casino games, sports betting, and promotions, through a well-organized menu.

4.2 Visual Appeal

The catalog’s visual design is visually appealing, featuring vibrant colors and clear graphics. This visually engaging interface captures users’ attention and encourages them to explore the app further.

4.3 User Feedback

Pin-Up’s user-friendly interface incorporates user feedback in the form of reviews and ratings for games and sports events. This feedback helps users make informed decisions about what to play or bet on, enhancing their overall experience.


In conclusion, user-friendly interfaces are instrumental in shaping the success of app catalogs by positively impacting user engagement and app discovery. Navigational ease, visual appeal, and user feedback are key elements that contribute to a user-friendly experience. As demonstrated by the Pin-Up app download experience, a well-designed interface can enhance the overall user journey, leading to higher user engagement, increased app downloads, and improved app discovery. App catalogs that prioritize user-friendliness are more likely to thrive in the competitive digital landscape, benefiting both users and developers alike.

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