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Audit risk and auditors response

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Audit risk and auditors response

  • This topic has 3 replies, 2 voices, and was last updated 1 week ago by Kim Smith.
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  • July 29, 2022 at 7:15 am #662077
    Sourav9271
    • Topics: 158
    • Replies: 104
    • ☆☆☆

    Hello sir,
    I know it’s a fairly recurring question to identify and explain Audit risk and Auditors response to those risk…

    Can I use the words:
    Inspect, observe, recalculate, enquire,reperform,Analyse,Trace as auditors response..???

    July 29, 2022 at 2:04 pm #662102
    Kim Smith
    Keymaster
    • Topics: 91
    • Replies: 6208
    • ☆☆☆☆☆

    Short answer NO … those are the verbs we use in describing the tests of details/controls and analytical procedures by which we obtain audit evidence e.g. in a “substantive procedures” question – BUT, as the examiner writes in the examiner’s reports, although a response to an identified risk MIGHT be a substantive procedure, it won’t usually.

    e.g. if there is a risk regarding an accounting policy that does not comply with IFRS, the first response is to “discuss” – e.g. with FD – with a view to the policy being changed/financial statements adjusted.

    Or sometime a response to a risk is that the audit team needs to exercise a higher degree of professional scepticism – e.g. regarding the timing of revenue recognition.

    You should find examples and further clarification in the examiner’s reports https://www.accaglobal.com/ie/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/examiners-reports1.html

    July 29, 2022 at 3:01 pm #662106
    Sourav9271
    • Topics: 158
    • Replies: 104
    • ☆☆☆

    Okay sir quite a helpful reply…

    July 29, 2022 at 3:31 pm #662108
    Kim Smith
    Keymaster
    • Topics: 91
    • Replies: 6208
    • ☆☆☆☆☆

    You’re welcome!

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