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substantive procedure

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › substantive procedure

  • This topic has 5 replies, 2 voices, and was last updated 4 years ago by Kim Smith.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • August 16, 2020 at 3:57 pm #580782
    faizafayyaz
    Participant
    • Topics: 9
    • Replies: 6
    • ☆

    “Consider whether the valuation undertaken provides sufficiently objective audit evidence. Discuss with
    management whether Martin Dullman has any financial interest in Elounda Co which along with the family
    relationship could have had an impact on his independence.” can you please tell me whether this relates to an assertion? if so, which one? if not, how is it a substantive procedure without relating to an assertion?

    “Agree the revalued amounts for these assets are included correctly in the non-current assets register” would this be tracing or vouching?

    August 17, 2020 at 7:44 am #580838
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8291
    • ☆☆☆☆☆

    Since Martin is an expert carrying out the valuation it is relevant to the valuation assertion.

    See page 102 of the notes:

    “If the work of management’s expert is to be used as audit evidence (ISA 500), the auditor must
    evaluate:
    – The expert’s competence, capabilities and objectivity…”

    Please note also that this is a free service not a 24/7 service; I could not reply to this yesterday (Sunday) because you did not cite the source of the question (September 2016) and I was not at a computer to confirm the context of the quote until this morning.

    August 17, 2020 at 2:58 pm #580914
    faizafayyaz
    Participant
    • Topics: 9
    • Replies: 6
    • ☆

    oh no, i had mentioned this question because i thought it had gone unnoticed due to it’s title which was very similar to another question of mine, thank you for the assertion though, is it important that we have to link every substantive procedure to an assertion?

    August 17, 2020 at 3:48 pm #580920
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8291
    • ☆☆☆☆☆

    No worries – and a good reason for giving your posts more descriptive titles 🙂

    To “describe” a substantive procedure is not just to state what the auditor should do – but why. Identifying the relevant financial statement assertion(s) is just one way of explaining why.

    Hence the article “The Audit of Assertions” https://www.accaglobal.com/uk/en/student/exam-support-resources/fundamentals-exams-study-resources/f8/technical-articles/assertions.html

    However, using the work of others (internal audit/experts) has “special considerations” which will also be relevant to explaining audit procedures in a particular area.

    August 17, 2020 at 4:16 pm #580922
    faizafayyaz
    Participant
    • Topics: 9
    • Replies: 6
    • ☆

    that’s helpful, thank you !!!

    August 17, 2020 at 4:46 pm #580929
    Kim Smith
    Keymaster
    • Topics: 133
    • Replies: 8291
    • ☆☆☆☆☆

    You are most welcome!

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘substantive procedure’ is closed to new replies.

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