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Hi Sir Mike!
On Question 1 (b.) of December 2013, there is a tutorial note saying:
“As Clampton and Co. is no longer the auditor of Broadway Co., there is no need for any further information in relation to audit planning, other than that needed to perform the audit procedures listed below.”
The Question requires to recommend the principal audit procedures to be performed in respect of the disposal of Broadway Co.
How would the an audit planning answer differ from an audit procedure?
Also in another question it asks for “audit evidence you would expect to find in your review” and one of the answer given is:
– Review the post year-end orders/board minutes to assess if any conclusion regarding completion of the machine has been made and if it can be sold to an alternative customer, whether any potential customer has been identified. (June 2016 Q2)
-> I would have thought that this is an audit procedure rather than audit evidence? So what’s the difference of audit evidence, audit procedure, and audit plan?
Sorry for the long question and hope to hear from you soon.
Best tegards,
Kyle“How would the an audit planning answer differ from an audit procedure?”
I don’t understand this question 🙁
“> I would have thought that this is an audit procedure rather than audit evidence?”
Agreed, this is a procedure. It’s easily converted into evidence …
“there should be evidence on file of a review having been carried out of post year-end orders/board minutes. The review should show the senior’s assessment of whether the board minutes reach any conclusion regarding completion of the machine and whether it can be sold to an alternative customer if one has been identified.”
Procedures are generally very easy to convert into evidence and evidence is equally easily converted into procedures
You KNOW the difference between evidence and procedures … why do you keep asking me?
As for planning … you know what is involved there as well.
Just because there’s an inconsistency or two within printed solutions doesn’t mean that my answers are lacking probity!
Believe what I’ve told you and move on! There’s no point in scoring points against the publishers on those few(ish) occasions when they slip up. Move on 🙂
Hi Sir Mike!
Thanks for clarifying how an evidence could easily be converted to procedures and vice versa.
Looking at the answers of Q1(b) of December 2013, as the question says “no need for further information in relation to audit planning other than the procedures listed below…” -> so the answers are all audit procedures. But “what if” the question would suddenly require information on audit planning, how would the answers differ from those audit procedures given? A few examples would be really great.
Hope to hear from you soon.
Best regards,
KyleI imagine that the audit planning element of the procedures to be performed would be very much in generalised form – an introduction – followed by more detailed guidance
Maybe something like this:
“From discussions with management, it appears that Broadway is soon to be sold from the group. We need to ensure what is the situation as at the date of the audit and confirm the appropriateness of classifying Broadway as a discontinued operation or as an asset held for sale
To this end we should plan to:
review correspondence with prospective purchasers to determine the level of interest
determine the appropriateness of the asking price by comparison with the asking price for similar businesses in the area – may well need to consult briefly with a commercial selling agent
review the evidence concerning the active marketing of Broadway – invoices for press advertisements, agreements with commercial selling agent, costs of brochure publication, information about the sale of Broadway on the group’s internet site
confirm by inspection and enquiry that Broadway is available for immediate sale
ensure that preparations and calculations for last year’s comparative figures have been completed”
How much more would you need?
OK?
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