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Audit evidence (Kaplan kit OT case)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Audit evidence (Kaplan kit OT case)

  • This topic has 2 replies, 2 voices, and was last updated 2 years ago by Kim Smith.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • May 27, 2023 at 1:01 pm #685187
    youshaali
    Participant
    • Topics: 51
    • Replies: 87
    • ☆☆

    During the testing of Hemsworth Co’s payables balance, several misstatements were found.

    Which of the following is the most appropriate initial response your audit firm should take?

    1) Report the matter to the client.

    2) Increase the amount of testing.

    3) Suggest the audit opinion is modified.

    4) Discuss the issue with the audit manager.

    Hello tutor!!
    Option 2 is right but I choose option 4 which is wrong and is second response.

    I have a question why would we increase our amount of testing as initial response ?

    And on what account balance or transaction should we increase amount of testing ?
    Because we have been tested the payables and in my opinion there is no further need to assess payables.
    Thank you!!

    May 28, 2023 at 7:05 am #685212
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    You as a student of AA may think you would refer any number of matters to a more senior person, but this Q asks what should be the response of the “audit FIRM”.

    May 28, 2023 at 7:12 am #685213
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    You haven’t said, but perhaps somewhere in the scenario it mentions having tested on a sample basis. So if you find errors you would extend testing to better evaluate the potential misstatement in the population.

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