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October 5, 2023 at 1:50 am
I appreciate the lectures but my one concern here is you explained Reconcile, aged listings, scrutiny of board minutes etc…But you haven’t explained which assertions we are confirming by performing these test.
Kim Smith says
October 5, 2023 at 8:17 am
Please ask technical questions on the tutor forum https://opentuition.com/forum/ask-acca-tutor-forums/ask-the-tutor-acca-audit-and-assurance-aa-exams – this “comment” space is for comment only.
If you read the chapter also, you will see that external confirmation is principally existence, reconciliation covers accuracy, completeness and cut-off and aged listing is valuation.
October 23, 2021 at 2:15 pm
a) can you explain the need to do subsequent cash testing in trade receivables? And also is there a similar testing for trade payables as well?
b) can you explain ‘trace outstanding lodgings to pre year end cash book and post year end bank statement.’
October 23, 2021 at 5:29 pm
August 18, 2020 at 3:40 pm
hello sir im very thankul to you and for your lectures btw, i have a query about the process of how a sale works, so i always understand what you explain as i try to understand everything around it, the whole picture and usually youre explanations are enough for me to get it too but when you talked about TRACING, i couldnt follow up as i dont know how the process of recording the different aspects of a sale in documents by a company work, eg the sales invoices and the dispatch notes, id love to know the whole process, i tried googling it but couldnt find an answer, id be very grateful if you could maybe send a link of where i could understand this process in depth or maybe if you dont mind and have the time, just give a brief summary of what i could use to understand a little better for the AA exam as it seems its a bottleneck for me to understand some things you say because i dont know this process. Thank you sir for all your work 🙂
August 19, 2020 at 7:50 am
This is largely assumed knowledge – transactions are recorded in books of prime entry – see Chapter 10 of our FA notes and lectures which you will find here https://opentuition.com/acca/fa
Separate records are kept for inventory – see Chapter 5 of our MA notes and lectures which you will find here https://opentuition.com/acca/ma
What we’re doing in AA is bringing together the transaction flow and the physical goods flow – see Chapter 13 of the AA notes. The arrows show what needs to be traced/tracked. Please use the ask the tutor forum for queries that do not relate directly to a lecture (that is where I will see them).
August 20, 2020 at 7:25 am
Yes sir you’re right. Thank you so much for taking the time out and helping out, next time i will ask on the forum sir.
June 22, 2020 at 4:13 pm
Hi, I wonder if you could tell me what these receivables substantive procedures test for – For any slow moving/aged balances review customer correspondence to assess whether there are any invoices in dispute. – Review board minutes of Dashing Co to assess whether there are any material disputed receivables the acca exams 2017 sep dec state Accuracy, valuation and allocation Kaplan acca state existence and rights and obligations which is right? or is it both.
June 22, 2020 at 7:09 pm
It’s all three – “existence”, “rights” (obligations pertains only to a liability) and “accuracy and valuation” (allocation would be something like allocating depreciation expense to the cost of inventory).
So a customer could dispute an invoice/balance because the goods were never delivered (the debt does not exist) or the goods were delivered but to another customer (there are rights but not with this customer) or the goods were delivered but they have been wrong priced (accuracy and valuation) or the goods were delivered and correctly priced but the customer refused to pay for some other reason (bad debt allowance is a matter of valuation).
January 29, 2020 at 3:41 pm
Is there particular criteria for selecting which methods are used?
August 25, 2017 at 7:12 am
While sending third party confirmations – they are send on a “Client letter head” or they are send a on “Auditors Letter head”
Ken Garrett says
August 25, 2017 at 12:11 pm
Client letterhead. This gives the client’s customers ‘permission’ to confirm amounts to the auditor. Replies should go directly to the auditor.
August 25, 2017 at 4:34 pm
Even my understanding was the same but I came across one question of BPP which says:-
Q – The audit team has started to perform audit fieldwork on Wilbur Co. In order to gain assurance over the company’s bank balance, you have asked Julie(auditor) to arrange for a bank confirmation letter to be sent to Wilbur Co’s bank.
Which of the following summarises the steps to take in preparing the bank confirmation letter?
A Written on the audit firm’s headed paper; information requested to be sent directly to the auditor B Written on the client’s headed paper; information requested to be sent directly to the auditor C Written on the audit firm’s headed paper; information requested to be sent directly to the client D Written on the client’s headed paper; information requested to be sent directly to the client
The answer for the same as per BPP is A.
Can you please help me further. Or is it like when we raise bank confirmations – we use Auditor’s letterhead and in other cases like receivables and payables we will us Client’s letterhead.
August 25, 2017 at 8:31 pm
Sorry, for some reaaon I read your original query as relating to a receivables confirmation.
Bank confirmations are differemt because the client gives standing permission for its bank to reply to auditor’s queries. Therefore, letters to the bank for balance confirmation can be on auditor’s note paper.
August 24, 2016 at 11:15 pm
Why should nil balance on the AR ledger be included in the circularisation to customer?
August 24, 2016 at 11:26 pm
Just suddenly thought to myself: is it to confirm that no receivable balance exist?(existence assertion) *__*
August 26, 2017 at 8:13 am
August 25, 2016 at 6:28 am
To test completeness. Perhaps it shouldn’t be 0.
August 26, 2016 at 11:43 pm
Thank you! Big fan of the lecture by the way.
hassan rana says
June 5, 2016 at 5:07 am
Well Sir. If we are asked to give substantive procedures for revenue.. So can we write prodeures of sales?
Well Sir. If we are asked to give substantive procedures for revenue.. So can we 2rite prodeures sales?
January 9, 2016 at 9:00 pm
In the chapter notes, it says that a Negative Circularisation is when you ask for a reply only if the balance is out of agreement. What agreement? What does ‘out of agreement’ mean in this context?
January 10, 2016 at 1:15 pm
The circularisation letter would ask a customer to confirm that they owe, say $1,200. If the customer thinks they only owe, say, $1,000, then the balances do not agree. A negative circularisation hopes that in those circumstances the customer will reply stating that so that the difference can be investigated.
January 6, 2016 at 5:47 am
i can’t download this video. please Help me.
January 6, 2016 at 2:38 pm
No videos can be downloaded.
September 3, 2015 at 1:16 pm
open tuition,thank you for this lesson
August 12, 2015 at 6:21 am
excellent lecture. one question about Correspondence:
does the auditor write to the customers about balances in addition to the circularization? or does the auditor simply looks at the correspondence that has already happened between the client and its customers?
August 12, 2015 at 8:46 am
Auditor does not normally write – except to follow up circularisation letters that haven’t had replies.
August 12, 2015 at 9:41 am
cool!! .. another question but this is more related to the technique of answering the question rather than the answer it self:
suppose u r given 2 liner scenario about a company and the question is as follows (10 marks):
Explain the audit procedures that should be carried out on the receivables balance at Delphic, explaining the reason for each procedure.
1. how many procedures shd the answer have? 2. how important is it that procedures pertain to different assertions? for example, we know that Receivables key assertions are existence and valuation. what if, in the heat of the moment in the exam, you can only remember the procedures related to existence. how wd the examiner mark such a question?
thanks in advance
May 15, 2015 at 4:15 pm
Thank you Open tuition
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