substantive testing

Substantive testing refers to an auditing process where auditors evaluate financial information by directly examining the records and figures to ensure accuracy. This involves checking transactions, balances, and supporting documents to confirm that they are correct and comply with accounting standards. Essentially, it helps auditors verify that a company's financial statements are truthful and not misleading. By performing substantive tests, auditors can identify any errors or discrepancies, ensuring that stakeholders have reliable information about the company's financial health.