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Hello another question concerning items in the sfp like inventory receivables payables ppe .
If I want to give a response on them is it pkay to start it off by saying inspect the draft financial statement or should I specify the name of the itemI think it would be helpful for you to look at a set of financial statements – if you put “annual report 2024” into a browser you should be able to find numerous downloadable pdfs – choose one from any company name that you recognise – download and search on the financial statements. LOOK at the line items in the statement of financial position/balance sheet and ask yourself – “how can looking at this be a response to an assessed risk of material misstatement?”
Short answer – it tells you nothing.
An amount in the financial statements is the starting point for addressing the risk of existence (for balances) and occurrence (events and transactions) – I have made many points about the importance of the “direction” of testing in response to a risk of misstatement – this is one https://opentuition.com/topic/lancaster-acca-study-hub-question
For more examples search “aa completeness existence direction” in the search function https://opentuition.com/search-opentuition
And do please then ask if you require further clarification.
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