Audit procedures

In this lesson

1. 0:00 Introduction to audit procedures
2. 0:07 Tests of control and substantive testing
3. 0:39 Five types of audit procedure AEIOU
4. 1:50 Analytical procedures explained
5. 2:42 Inquiry and inspection methods
6. 3:35 Observation and recalculation techniques
7. 4:56 Proof in total testing concept
8. 6:26 Generic audit tests by assertion
9. 7:13 Completeness assertion testing
10. 8:17 Obligations, rights and valuation tests
11. 9:21 Existence and transaction assertions
12. 10:19 Creating specific audit procedures
13. 12:06 Writing detailed audit test instructions
14. 13:08 Audit procedure components explained
15. 15:28 Action, item, what and why framework
16. 17:26 Applying framework to board minutes example

About this lesson

The video covers the two main categories of audit work: tests of control, which evaluate whether an entity's internal controls are effective and operating throughout the period, and substantive testing, which detects material misstatements in specific balances and transactions. You'll explore the five core types of audit procedure using the acronym AEIOU: analytical procedures, inquiry, inspection, observation, and recalculation or re-performance. Each technique serves a different purpose—analytical procedures highlight unusual fluctuations, inquiry gathers explanations from management and external parties, inspection examines records and physical assets, observation watches controls in action, and recalculation verifies accuracy. The lesson also introduces proof in total testing, a practical technique for developing expectations about large or complex figures like depreciation and wages. Crucially, the video emphasises that generic audit tests won't earn marks in your exam. You must write specific, detailed procedures that follow a clear structure: action (what you're doing), item (what you're examining), what (what specifically you're looking for), and why (which assertion you're testing). This framework ensures your audit team—or the examiner—understands exactly what needs to be done and why it matters. You'll see how to break down real audit procedures into these components to maximise your marks and demonstrate genuine auditor competence.

Duration: 19m