Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Audit Risk
- This topic has 3 replies, 3 voices, and was last updated 8 years ago by Ken Garrett.
- AuthorPosts
- August 4, 2016 at 11:18 am #331377
I cant quite differentiate between Auditors response and substantive procedures. What is the difference between them ?
Response is also a way of getting evidence about risks and procedures are about assertions i understand. But both of them looks similar in answers
August 4, 2016 at 1:03 pm #331406Another query , when an asset is disposed off , what change happen to dep policy. i saw it as an audit risk , that the dep policy might not have changed
August 4, 2016 at 1:39 pm #331411Auditor’s response is basically a recommendation on what the auditor will use to verify that the financial statements or procedures is accurate.
I.E. company received loan from bank (audit risk) and response will be to ask of management whether they have received the loan and agree to the financial statement.
Substantive procedure is used to perform tests on the internal controls within the organization.
IE to confirm inventory balance select a sample of inventory and trace to inventory records at the year end and ensure that no raw materials at the pre year end have been excluded.
I hope this helps
August 5, 2016 at 7:32 am #331551Response is anything the auditors,decide to do eg increase substantive tests.
Disposing of an asset doesn’t usually cause any change in the depreciation policy except if they were always sold after 4 years and depreciation rate is 20% so that rate seems wrong.
- AuthorPosts
- You must be logged in to reply to this topic.