Guidance:

According to DTTL Audit Approach Manual the auditor may judge that it is not possible or practicable to obtain sufficient appropriate audit evidence only from substantive procedures. Such risk may relate to the inaccurate or incomplete recording of routine and significant classes of transactions or account balances, the characteristics of which often permit highly automated processing with little or no manual intervention. In such cases, the entity's control over risks are relevant to the audit and the auditor shall obtain an understanding of them ISA 315.30. Auditors are required to design and perform tests of controls to obtain sufficient appropriate audit evidence as to the operating effectiveness of relevant controls when substantive procedures alone cannot provide sufficient appropriate audit evidence at the assertion level. Paragraph 17 of Section 13300. If the auditor has determined that an assessed risk of material misstatement at the assertion level is significant risk, the auditor shall perform substantive procedures that are specifically responsive to that risk. When the approach to a sign consists only of substantive procedures, those procedures shall include test of details ISA 330.21. When responding to significant risk, simply increasing the extend of testing beyond that which would have been applied if the risk of material misstatement was no significant is unlikely to be and appropriate response for that significant risk. nature and timinanalytical procedures, see Section 23002-1). 43 paragrah section 13300. Combining Types of Substantive ProceduresThere are circumstances in which it may be desirable to use both substantive analytical procedures and tests of details to obtain sufficient appropriate audit evidence. Combined tests may be appropriate for testing the following:If we have identified a significant risk.Certain accounting estimates. For example, tests of details on the data used to develop the estimate and substantive analytical procedures to build an expectation of the estimate based on the data.

Activity during the period between an interim date and the balance sheet date, if primary tests are performed as of the interim date. For example, tests of details applied as of the interim date and substantive analytical procedures applied to activity in the period to the balance sheet date (or vice versa). Paragraph 17 of Section 23002-1

If we have determined that an assessed risk of material misstatement at the assertion level is a significant risk, we are required to perform substantive procedures that are specifically responsive to that risk and when the approach to a significant risk consists only of substantive procedures, those procedures are required to include tests of details Paragraph 41 of Section 13300. (i.e., either tests of details or a combination of tests of details and substantive analytical procedures). Paragraph 18 of Section 23002-1Because combining substantive procedures is more complex than applying a single procedure, a higher level of professional judgment may be needed when combining substantive procedures than might be needed if we were only applying a single substantive procedure. As such, the increased involvement of engagement management may be recommended when planning and evaluating the results of the combined substantive procedures. Paragraph 19 of Section 23002-1

Because combining substantive procedures is more complex than applying a single procedure, a higher level of professional judgment may be needed when combining substantive procedures than might be needed if we were only applying a single substantive procedure. As such, the increased involvement of engagement management may be recommended when planning and evaluating the results of the combined substantive procedures. (paragraph 19 of Section 23002-1).

Some substantive testing techniques (e.g., mini-max) are designed specifically to combine elements of substantive analytical procedures and tests of details. Paragraph 20 of Section 23002-1