Auditing: The relationship between the systems examination and the substantive testing of details

Hatherly, David J (1980) Auditing: The relationship between the systems examination and the substantive testing of details. MAcc(R) thesis, University of Glasgow.

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Abstract

It has long been recognised by the Auditing Profession that an examination of the accounting system and its internal controls allows the auditor, provided the results of the systems examination are favourable, to reduce the extent of the detailed substantive testing. Such an approach is conventionally called a 'systems' approach to the audit. It is also recognised that the auditor does not have to place reliance on internal control if he does not judge such an approach to be cost effective. In this case the auditor maintains the level of substantive testing and the approach is termed a 'substantive' approach. In this thesis it is argued that the generally recognised role of the systems examination in allowing a reduction of substantive testing is only one of three important audit roles which the systems examination may play in support of the substantive testing. The other two less well recognised roles are; a) as a source of information to help the auditor select a statistical sampling technique for the substantive testing, and b) as a source of information to help the auditor assess pieces of evidence used in the substantive testing where the evidence has been processed or generated by the system. The main body of the thesis consists of a detailed study of each of the three roles. In the Conclusion it is argued that a recognition of three, rather than one, roles for the systems examination allows a greater understanding of the true distinction between what are conventionally described as the 'systems' and 'substantive' approaches to the audit. Further research is recommended both to substantiate the tentative a priori reasoning of the conclusion and to provide empirical evidence of the extent to which there is a lack of understanding on the part of practising auditors of the three aspects of the relationship between the systems and substantive evidence.

Item Type: Thesis (MAcc(R))
Qualification Level: Masters
Keywords: Accounting
Date of Award: 1980
Depositing User: Enlighten Team
Unique ID: glathesis:1980-73214
Copyright: Copyright of this thesis is held by the author.
Date Deposited: 14 Jun 2019 08:56
Last Modified: 14 Jun 2019 08:56
URI: http://theses.gla.ac.uk/id/eprint/73214

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