- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
scenario: “However, for this period no supplier statement reconciliations or payables ledger control account reconciliations have been performed.”
Audit risk: “This a key control which is being overridden and as such there is an increased risk of errors within trade payables and the year?end payables balance may be under or overstated.”
ma’am can a suitable AUDIT RESPONSE to this be that “auditors should either perform the supplier statement reconciliations and payables ledger control account reconciliations by themselves or request the management to do same.”
That it hasn’t been done is a control deficiency – this can’t be “made good” by the auditor doing it.
If the auditor planned to rely on the operating effectiveness of this direct control (see S21 update – this is now the term for key control) and thereby reduce substantive procedures, the auditor will now have to do more in the way of tests of details at the reporting date than was originally planned. For example, on the y/e reconciliations (that management should be reminded will be required for audit).got it ma’am.
One more thing ma’am if we are not aware of the latest terminologies or changes in the syllabus then do we lose marks for that? This is really concerning for me as i don’t have the latest text and kit, i am using the 2020-21 version.
That’s why I’ve written a 2021-22 update: https://opentuition.com/acca/aa/audit-and-assurance-aa-changes-for-september-2021-june-2022-edition-notes
I don’t think students will lose marks for using slightly out of date terminology because I’m sure allowances are made for the fact that many students are resits and don’t necessarily have access to updated materials. That said, the changes to the 2021-22 syllabus are mostly driven to reflect ISA 315 (Revised) so exam questions are going to refer to “direct controls” not “key controls” – that’s why I’m pointing it out to you.
- You must be logged in to reply to this topic.