Tests of Controls
Evaluate each control tested, and conclude whether reliance on it is supported by the work recorded.
- Ledger + tests of controls summary
How the result is read
A deviation rate seen in a sample is not the rate in the population (ISA 530.A21, AU-C 530.A27). For a control run daily or many times a day the population is large, so the sample gives an upper deviation limit: at 90% confidence, the Poisson factor for the deviations found — 2.31 for none, 3.89 for one, 5.33 for two — over the sample size, and reliance is supported only when that limit is within the tolerable deviation rate. A monthly or quarterly control has too few occurrences for that arithmetic; practice asks for a minimum sample by frequency, with no deviation at all. Where reliance is not supported, the controls cannot reduce the substantive work.
In the application
Tests of Controls is filed under Completion, index letter L. "Run all analyses" runs it with every other analysis the ledger and the documents loaded can answer. The worksheet states the population it tested on its face — or "Not applicable" with the reason when a column it depends on is empty — and the Excel workbook the engagement exports files it under L, beside an index of the source files with their SHA-256 fingerprints.
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