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Hello Sir!
When a question just asks for a identifying audit risks and explain the auditors response.Can we mention some substantive procedure in the auditors response and will be awarded marks?Or our answer should be general like instead of writing
“Recorder purchases their goods from South Asia and the goods are in transit for two weeks. At the year end there is a risk that the cut-off of inventory, purchases and payables may not be accurate. The company correctly accounts for goods when they receive them. Therefore at the year end only goods which have been received into the warehouse should be included in the inventory balance and a respective payables balance recognised.”(audit risk)
“The audit team should undertake detailed cut-off testing of goods in transit from the suppliers in South Asia to ensure that the cut-off is complete and accurate. “(auditors response) we write “Review the pre year end and post year end receipts of goods to make sure they are recorded in the correct period and correct cut off is applied.”(my auditors response)Sir! tell me me can we include substantive tests into the auditors response?
You need to learn patience. I’m not sitting here waiting to instantly respond to your every query. We try (but do not promise) to reply within 24 hours.
If you don’t include substantive tests, how are you going to describe the auditors’ response? You can’t simply say ‘Take care here’.
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