Material inconsistency
A material inconsistency occurs when other information contradicts the financial statements or knowledge obtained during the audit in a way that may be material. The auditor investigates and evaluates whether the other information, financial statements or audit understanding need revision.
Worked example
The annual report says debt fell, while the audited statements show a substantial increase; the auditor investigates.
Common mistake
Do not automatically modify the financial-statement opinion without determining the source and implications of the inconsistency.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AAA (INT) | Direct | September 2026–June 2027 |