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Hi there
Thanks for your work which providing great help to my study.
Referring to your video on examining internal control on purchase system, why would a lack of internal control on choosing an competitive price of supply have an affect on material misstatement in finical statement, this seem to be an business risk(a bad business is done by client) which is not part of external auditor objective.
In reference to auditor objective, does it mean auditors have to assess all information included in financial statement which might include claims made by the client on achievement of objective, e.g Client rankings and market shares and other non financial information.
Thanks
Really, I agree with you and I think the ACCA’s distinction between business and audit risk is a little porous. You will see it again when looking at going concern where one sign is reliance on outdated technology – which is a business risk too.
Concentrate on the part of internal control that talks about safeguarding assets. Thus, keeping inventory secure is relevant. So is ensuring the company isn’t paying too much for supplies by at least having a formal procedure for awarding contracts such as always obtaining three quotes.
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