Auditing Cash Collection Cycle.

[@mustakes]

Thank you Prof ✅

[@AccountingLectures]

You are very welcome. Here's my auditing course: farhatlectures.pathwright.com/library/auditing-and-attestation-awtel/about/

[@W8rrfsdY73]

@ Farhat's Accounting Lectures the reason people are finding the videos confusing is because of the title. Please number them appropriately. Also, in the earlier video (sales cycle) you started by analyzing the controls, and in this video you are starting by analysing test of transactions - which is throwing a lot of people off.

[@antonmursid3505]

Antonmursid 🇮🇩🙏🙏🙏

[@saddestdayever1276]

I don't want to be rude but can you please quit complaining? Professor Farhat is doing an excellent job and you get to access most of his videos for free!

[@Businesswiz]

21:42 Professor, I don't understand the difference between the column "Test of controls" and "Substantive tests of transactions". I guess you said this before, tell me if I'm right. Test of controls tests one transaction, whereas Substantive tests, tests a group of transactions. Its just that both columns seem to mean the same thing to me, I'd like to know the difference. Thank you.

[@AccountingLectures]

Test of control is to determine if an internal control is working properly. For example, you need to know if all credit sales are reviewed prior to approval. The auditor will selected a sample (many not just one) of transactions to test that control. The auditor might be looking for someone's initial as an indication of the approval. Test of control helps the auditor to determine if the control is working or not working as designed. Kind of yes or no. The audit is examine attributes.Substantive testing is mostly done to determine if the account balance for account receivable is fairly stated. Here's you are determining if the dollar amount is fairly stated. Hope this brief and short explanation helps.

[@Businesswiz]

So substantive testing tests more in the realm of $ amounts. Where as tests of controls tests if a control such as segregation of duties or authorization is actually working and being implemented. Is substantive testing the same as test of details?

[@AccountingLectures]

Substantive tests: audit procedures designed to test for dollar (monetary) misstatements of financial statement balances. Tests of details of balances: audit procedures testing for monetary misstatements to determine whether the eight balance-related audit objectives have been satisfied for each significant account balance. Both deal with monetary misstatements.

[@antonmursid3505]

Antonmursid🇮🇩🙏🙏🙏