Q). Which of the following is a substantive audit test?

A. Verifying that a management check has been performed regularly
B. Observing that user IDs and passwords are required to sign on the computer
C. Reviewing reports listing short shipments of goods received
D. Reviewing an aged trial balance of accounts receivable

Answer: The correct answer is "D". Reviewing an aged trial balance of accounts receivable is a substantive audit test. It provides evidence of the validity and propriety of the financial statement balance. All the other options i.e. A, B and C are more of compliance tests. Compliance tests provide reasonable assurance that policies and procedures are being followed.

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