Final answer:
The performance of substantive procedures is not a primary procedure for auditors to assess the design and implementation of internal controls; such procedures are aimed at detecting material misstatements. Primary procedures include analysis of previous audits, management interviews, and review of documents.
Step-by-step explanation:
The primary procedures auditors use to obtain sufficient knowledge about the design of the relevant controls and to determine whether they have been implemented include previous experience with the entity, inquiries of appropriate management personnel, and inspection of documents and records. However, the performance of substantive procedures is not a primary procedure for this purpose. Instead, substantive procedures are designed to detect material misstatements in a financial statement at the assertion level. They are more about verification and providing evidence regarding the accuracy of data presented in the financial statements.
Auditors use various methods to understand internal controls such as discussions with management, walk-throughs of processes, observation, and examination of evidence that controls are in place. For instance, an auditor might review documented policies and procedures, observe employees performing controls, or test the controls directly by re-performing procedures. Insights from previous experience, combined with information from interviews with management and staff, help auditors to assess control design and implementation.
Auditors must also engage in the location, examination, and analysis of sources. They scrutinize company records and transactions to answer leading questions about financial practices within an entity. By meticulously reviewing these primary sources, they can identify any controls that require further investigation or might potentially contribute to risk.