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Audit Risk Response

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Audit Risk Response

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by Ken Garrett.
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  • June 3, 2017 at 5:51 pm #389988
    evelynlzy
    Member
    • Topics: 11
    • Replies: 5
    • ☆

    Hi Sir,

    I’m wondering if TOC can be included as some of the answer for audit response?

    Eg: audit risk – Inventory could be under or overstated if the continuous (perpetual) inventory counts are not complete and the inventory records accurately updated for adjustments.

    Audit response – Observe the process of inventory counting and process of adjusting inventory record to ensure procedure is adhered to and quantity is recorded accurately.

    June 3, 2017 at 6:50 pm #390002
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10605
    • ☆☆☆☆☆

    Yes. That is fine. Audit risk can be reduced either by ensuring internal controls are operating well (low control risk) or the auditors performing lots of substantive tests (to lower detection risk).

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