Master ACCA F8 Audit & Assurance 2025 – Ace It with Confidence and Style!

One of the key purposes of undertaking substantive testing is to detect material misstatements in financial statements. Substantive tests are designed to gather evidence regarding the accuracy and completeness of financial information. This process involves verifying transactions and balances, which assists auditors in forming an opinion on the fairness of the financial statements presented by the entity.

Substantive testing focuses on direct evidence regarding the figures included in the financial statements, assessing both the existence of assets and liabilities and ensuring that transactions are recorded correctly in the appropriate periods. By identifying any discrepancies in these figures, auditors can evaluate whether the financial statements are free from material misstatements, which ultimately safeguards stakeholders' interests, enhances the reliability of the financial reporting, and upholds the integrity of the audit process.

Other options, while important in the context of an organization, do not directly relate to the primary goal of substantive testing in an audit. Compliance with policies and assessing the efficiency of operations are more aligned with internal controls and operational audits, while comparing against industry standards falls under analytical procedures rather than substantive testing specifically.