Bucket Approach to Audit Comfort

1
Bucket Approach to Audit Comfort

• Determine the level of comfort you need taking
  into consideration the acceptable level of Audit
  Risk as well as the Inherent Risk of the
  audit/account. The larger the risk, the larger
  size of bucket you need.
• Determine how you will fill your bucket based
  on Controls, Substantive Tests and Analytical
  procedures.
• Public companies subject to 404 procedures will
  likely have more of the bucket filled with
  Tests of Controls, some Substantive Tests and
  some Analytical Procedures.
• Smaller private companies without strong
  controls, will have a much lower level of comfort
  being obtained from Controls and the Substantive
  Tests and Analytical Procedures will make up most
  of the bucket.
• Reviewsmostly Analytical Procedures with maybe a
  little Substantive Tests and/or Controls.

Analytical Procedures
Substantive Tests
Tests of Controls
Lines move depending on the level of comfort you
need from each type of test