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Hi sir ,
when i was doing mcq form bpp i came across this question :F co owns a chain of four restaurent and is subject to national regulation concerning hygiene in food prepration process . Non compliance can result in larege fine or closure of the restaurent concerned .
As F co external auditor what is your responsibility regarding the companys compliance with the hygiene regulations ?a) prevent and detect non compliance with regulation
b) perform specific audit procedure to identify possible non compliance
c) obtain sufficient appropriate audit evidence about F cos compliance with regulations
d) nothing – food hygiene regulation do not have a direct effect on the financial statements .I go with option c but in the rev kit its given option b .can you exlplain why my option c is wrong and option b in the rev kit is correct ?
They are very close. I think that (c) implies too much work. We are not really concerned with proving compliance (not the auditor’s job) but rather with identifying non-compliance because that’s when there would be a possible fine and perhaps the need for a provision.
So you would look at letters and notices received from the regulator complaining about non-compliance, but you wouldn’t inspect the kitchens to prove compliance. Apart from anything elese you wouldn’t have the expertise.
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