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Dear Professor,
If a client wants to release final results earlier in a given year, say it has a yr end of 31dec, then my exam kit states that “The timetable should be confirmed with the finance director. If it is to be reduced, then consideration should be given to performing an interim audit in late December or early January to reduce the pressure on the final audit.”
how will late dec or early Jan make sense for interim audit? isnt it too late for interim audit, like already 12months have passed.
Many thanks
Although “interim audit” generally means before the y/e (reporting date) it tends to be used to mean the “systems” or “compliance” part of the audit to confirm the effective operation of internal controls and so reduce the extent of substantive procedures at the final audit.
If an interim audit is mid-year – the auditor only has evidence of operating effectiveness for the period covered by the tests of controls – so would still have to audit the remainder of the period. For a 31 December y/e the auditor could be testing controls for the period in early January.
Maam am really sorry, but my cognitive faculties seem to be too incompetent to comprehend this.
Y/e 31 December.
Interim audit 31 August tests controls for the 7 months to 31 August?Auditor could instead (or as well as) test controls for the entire year in late December or early January.
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