Substantive Tests

1. Explain why there is an increased audit risk from conducting procedures before the end of the reporting period. Identify two ways in which this increased risk is controlled.

2. Unrecorded liabilities occur when a client delays expenses of the current financial year to the next financial year. For this issue, identify the key assertion at risk for the expense account, and suggest a key substantive procedure that is often used to detect unrecorded liabilities.