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- April 24, 2020 at 11:47 am
Sir, for Sept / Dec 2019 Past year paper Q1,the examiner report stated that:
“question was set at the planning stage of the audit for an existing client. The scenario
revolved around a long-established group of companies audited by the same audit firm. ”
The question did not mention about the Ryder Group is an existing client?
How do we know the client is it new or existing one if the question is silent?
Thank you.April 24, 2020 at 12:37 pm
Generally, if a scenario is silent on a matter you don’t make something up – you wouldn’t for example “invent” or speculate whether a company acquired a subsidiary during the year or whether transactions are in a foreign currency – if relevant, such things will be indicated.
Note in the report as a common issue “Candidates giving rote-learnt risks with no application to the scenario …” there is NO place for rote-learnt answer points in AAA. So if new client issues were relevant to an answer they would have to be tailored to specifics in the scenario like when was the appointment made (in relation to current period audit)? why was there a change of auditor? what was the audit opinion on the prior year FS? etc, etc. In the absence of any details and absolutely no hint that this could be a new client the only meaningful assumption is that it is an existing client.
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