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Audit Evidence – ACCA Audit and Assurance (AA)

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  3. Please could you confirm which part of the lecture notes the Analytical procedures refers to as I am struggling to find the ratio content in the lectures notes. Thanks!

    (I am studying for the June 2024 exam)

      • HI Kim,
        Please don’t take me wrong, it wasn’t a complaint, it is just the confusion.When you(student) change to a new chapter and see a topic taught which is not found in the beginning of the chapter so as a pupil I get confused and loose interest.

    • No they are not the same thing – “audit process” is a general term which encompasses what is involved in the conduct of an audit overall, so not just the evidence gathering part of it but what is involved in planning and communicating with client management during the course of the audit.

      “Audit procedure” may refer to an action to obtain audit evidence, e.g. “inspection” (of a document or asset) or how the auditor obtains an understanding of the entity (e.g. risk identification) or “substantive procedure” (e.g. a test of detail) or a “test of control”.

      In the exam you should expect to see the term “audit procedure” – it will always be given context (e.g. see the Specimen exam):
      “… audit procedures … to test the VALUATION assertion for non-current assets”
      ” … audit procedures … the MOST reliable audit evidence”
      “… audit procedures … to form a conclusion”

  8. There are just some qualities which accumulate to make evidence more reliable; they are not mutually exclusive and there is no ‘best’. So:

    Written is better than oral. External independent is better than internal. So for example, putting these two variables together you could construct a ‘pecking order from worst to best, as follows:

    Worst: internal oral (eg a director’s oral assurance is worth practically nothing)
    Medium:external oral (eg a customer’s oral assurance that a certain amont is owed)
    Medium: internal written (eg directors providing written representations)
    Best: external written (eg written confirmation from a customer about an amount owed).

  9. Dear Sir,

    You spoke about the pecking order of sources of evidence. I am a bit confused when my lecturer says auditor generated evidence is the most reliable form of evidence .

    My study material states that independent external source of evidence is most reliable. I don’t know who is correct and what is the most reliable source of evidence to the least reliable source. Please clear my confusion.

    • Audit evidence which is obtains by auditor directly and from external source not from the client source is more reliable…for example:
      1. confirmation letter directly receive by auditor from confirming party
      2. Original document provides more reliable evidene than photocopies etc

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