TESTING AS A STRATEGY, TYPES OF

TESTING, TESTING TECHNIQUES,

AND THE PROCESSES CONDUCTED
IN THE TESTING PROCESS
METALANGUAGE

1. Testing – refers to an act of securing suitable evidence to support an audit. It

confirms the auditor’s initial opinion on the state of internal control, risk
management and governance processes.
2. Walkthrough - refers to a test where samples taken from a universe are
traced through the system to ensure that the auditor understands the
system.
3. Compliance – refers to a test where samples taken determines whether key
controls are adhered to or otherwise.
METALANGUAGE

4. Substantive – refers to a test where samples taken determines whether

control objectives are being achieved or otherwise.
5. Dual-purpose – refers to a test where samples taken where subjected to both
compliance and substantive test designs.
ESSENTIAL KNOWLEDGE
TESTING
Testing is the act of securing suitable evidence to support an audit. It confirms
the auditor’s initial opinion on the state of internal controls. It is a step in control
evaluation and a means to highlighting errors or non-adherence with laid down
procedure.
ESSENTIAL KNOWLEDGE
METALANGUAGE

TESTING TECHNIQUES
• Re-performance - A testing technique where the auditor himself will perform
what was done by the management personnel to check the accuracy of the
information and reliability of assertion by the auditee. It provides the highest
degree of assurance.
• Observation - Typically, it refers to describing the situation, person, event or
place from the outset. It is crucial to understanding the flow of transactions
and workings of internal control.
METALANGUAGE

TESTING TECHNIQUES
• Corroboration - It is a confirmation or support of a claim or evidence through
independent, authoritative and credible evidence. Corroboration is an explicit
description of the means employed in validating a document or record.
• Analytical review - Analytical review techniques help the auditor better
understand the client's business and anticipate potential risk. At the more
specific level, it helps the auditor allocate audit effort in a cost-effective
manner, that is, to accounts and transactions in direct relation to specific risks
of material misstatements.
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TESTING TECHNIQUES
• Inspection - It provides a highly reliable proof of existence of a certain control,
assets and some indication of value. It is more forceful and serious than
observation.
• Reconciliation - A process used to compare two sets of records to ensure the
figures are in agreement and are accurate. Reconciliation is used to determine
whether two or more related information are supportive of each claims.
METALANGUAGE

TESTING TECHNIQUES
• Expert opinion - The opinion of a professional, who has acquired the
knowledge and skills through study and practice over the years in a particular
field or subject, may be helpful in fact finding, problem solving, or
understanding of a situation.
• Comparison - It is the act of comparing two or more information to determine
points of similarity and difference.
METALANGUAGE
TESTING TECHNIQUES
• Questionnaires- Questionnaire is list of research questions or survey inquiries
asked to target respondents and are designed to extract specific information.
It serves four basic purposes: a. Collect the appropriate data; b. Make data
comparable and amenable to analysis; c. Minimize bias in formulating and
asking questions and; d. Make questions engaging and varied.
• Mathematical models - It is a method of simulating real-life situation with
mathematical equations to forecast their future behavior. Mathematical
modeling uses tools such as decision-theory, queuing theory and linear
programming, and requires large amounts of number crunching.
OPEN FORUM
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