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Hello Tutor
In the PYQ June 2015, the answer for Q6(a)
the substantive procedure for occurrence assertion is “Review the monthly breakdown of sales per key product, compare to the prior year and budget and investigate any significant
differences.”
and for completeness assertion is “Review the total amount of sales, compare to the prior year and budget and investigate any significant differences.”My doubt is the analytical procedure really help for occurrence assertion?
As it might be more suitable for completeness assertionPlease clarify to me, Thank you very much.
Well, if last year’s sales and this year’s budget were $10m and this year’s actual $20m you would certainly question if this year’s sales had really occurred or if an error/fraud had been committed. Of course, sales could have doubled but it looks odd.
Conversely if this year’s sales had been only, say, $10.5m, you gain some confidence that the sales occurred. It is not conclusive evidence and you would also trace to orders, invoices and receipts. However, it gives some evidence about the liklihood of occurrence.
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