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Hello sir,
Please when a question asks for matters to be considered, what exactly are the important factors that must be included.Hi
This is the general forum, you should repost in “Ask Tutor” for Mike’s reply, I use the following approaches. Would be interested in others opinions.
I use “MRS” when answering questions of matters to consider in relation to transactions….
Materiality – does the transaction present a material risk of misstatement, if misstated would it mislead users of FS?
Risks – What risk are there associated with the transaction/the matter being asked to consider, what would the impact be upon the FS?
Standard – What does the accounting standard require? How has the treatment differed from the requirement of the standard?
If matter to consider in relation to planning…
Do you want client? Do you know the client? Can depend on the integrity of client? What industry do they operate in? What are the risks of material misstatement – (Inherent & Control Risks)? Do we have resources to complete quality audit? Are there any threats to the fundamental principles – do we have safeguards which we can implement to combat these?
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Thats a good approach. Thanx Elsie.
Hi,
In my opinion, while answering this question, four things you should in mind.1) Materiality
2) Accounting and auditing standards (specifically their relevant portion, not all).
3)What actually risk is? and its consequences.
4)Conclusion, like effects on auditor’s report.I personally used this method while practicing these types of questions.
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