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Hello Sir
From the ACCA technical article about the audit risk and auditor response
here is the extract:”A common example of this is to request directly from the company’s bank as to whether the bank will provide a loan or renew a bank overdraft. The bank is not going to provide this type of information to the auditor, especially if they have not yet informed the company, and therefore this response will not generate any marks”If the auditor ask the bank to provide the information about the willingness to renew the loan facility or overdraft with the consent of the management ,will it be still invalid point and earn no mark as the bank will not provide this information to the auditor at all?Thank you.
When the bank has decided to provide a loan/renew a facility – it will inform the company, in writing, and that will provide audit evidence. A bank report for audit purposes could then include confirmation of the loan/facility, etc.
The bank is NOT going to provide “confirmation” of something that it hasn’t yet made a decision about. So however you word this – “whether the bank” or “willingness to renew” or something else – it’s not a valid answer point.Hello Sir, thank you for your best explanation for this query
I have doubt about if the answer for auditor response section are too detailing which much like substantive procedure ,will it considering no mark at all?
Thank you again.
If you look at any recent examiner’s report – e.g. this one for September 2018 https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f8/examinersreports/aa-examreport-S18.pdf you will see it says that “an auditor’s response does not HAVE to be a detailed audit procedure”. The examiner does not say that it cannot be a substantive procedure – it can be – but only 1 mark is available – so it shouldn’t be detailed.
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