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Dear tutor,
In the article, there is a paragraph:
“Exam questions on the auditor’s report have often taken one of two forms. The first is an appraisal of information provided within a scenario and a requirement to consider further actions and possible reporting implications, the other a critique of draft wording for an auditor’s report. These requirements are slightly different as one is at an earlier stage than the other and hence it is important to focus the answer to what the requirement is asking for. There are also different wordings of the requirements which mean that the answers to two questions may look similar but conclusions have been reached for different reasons.”
As per my understating, there are two types of questions: 1) Appraisal of information provided 2) Critical appraisal of draft audit report.
What does this statement mean “These requirements are slightly different as one is at an earlier stage than the other”? Does it mean Appraisal of information provided is at earlier stage of audit than critical appraisal of draft audit report?
Yes – so Q3(a) SD20 is an example of a type 1 Q:
(i) Comment on the completion matters to be considered in relation to the issues described and recommend the further actions necessary before the auditor’s report can be signed; and
(ii) Evaluate the implications for the auditor’s report if no adjustments are made to the financial statements.And Q2(b) M20 is an example of a type 2 Q:
Using the information detailed in Exhibit 2, critically appraise the extract ….So for 2 there is a draft report – but for 1 the report has not yet been drafted.
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