Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA BT – FIA FBT › Lack of audit evidence
- This topic has 1 reply, 2 voices, and was last updated 1 year ago by Ken Garrett.
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- September 13, 2023 at 1:27 pm #691988
Please give me a detailed summary of this topic,lack of audit evidence
September 13, 2023 at 5:53 pm #692005Audit evidence can consist of:
A: Analytical procedures (basically comparisons and ratios to look for ‘odd’ amounts)
E: Enquiry and confirmation directly from a third party – eg a debtors circularisation
I: Inspection of records and assets (eg verify the existence of a non-current asset))
O: Observation (eg watch warehouse count receipts of goods)
U: recalcUlation and reperformance (eg reperform a bank reconciliation to ensure it was done correctly).If none of these is carried out, or an appropriate procedure is not carried out, then there is a lack of audit evidence and a gap in the audit.
For example, auditors must carry out procedures to test if the cash on the SOFP is properly presented. Appropriate evidence is looking at a year-end bank statement (or preferably a bank certificate) and reperforming the bank reconciliation.
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