Approaches to testing

In this lesson

1. 0:00 Audit procedures and control testing overview
2. 0:34 Four key testing methods: inquiry, inspect, observe, perform
3. 1:17 Assessing control effectiveness and audit plan adjustments
4. 2:15 Three essential control attributes to test
5. 2:29 Design effectiveness: sequencing and follow-up checks
6. 4:02 Control existence: testing with dummy data
7. 5:14 Operating effectiveness: sampling and evidence verification

About this lesson

You'll discover how to assess whether controls are properly designed, actually exist, and have operated consistently throughout the period—essential knowledge for AA (Audit and Assurance). Through practical examples like sequential numbering checks and credit limit controls, you'll understand how to gather evidence that controls are effective and decide whether to rely on them or adjust your audit procedures accordingly. The video walks you through the audit testing methodology step by step. You'll see how auditors move from initial control risk assessment to designing specific tests, then how to respond if controls prove weaker than expected by modifying the nature, timing and extent of substantive procedures. Each of the three testing dimensions is explored with real scenarios: evaluating whether a control design actually addresses the risk, confirming a control genuinely exists in the system, and verifying it's been operating consistently. By the end, you'll be confident in selecting the right testing approach for different control situations and interpreting your results to inform your wider audit plan.

Duration: 6m