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Hi,
When it comes to providing substantive procedures, must we provide the assertion also such as” to confirm completeness or to confirm accuracy”?
Thank you!
This is what the examiner says about describing RISKS:
“To explain audit risk candidates MUST state the specific area of the financial statements impacted with an ASSERTION (e.g. cut off, valuation etc.), or, a reference to under/over/misstated, or, a reference to inherent, control or detection risk …”
Many requirements for substantive procedures questions will often specify the relevant assertion – again, the examiner’s comments:
“… often the requirement is to describe substantive procedures to address specific financial statement assertions, such as valuation, and any tests provided which do not test this assertion would not score any marks. For example in this session a question asked for “substantive procedures in relation to the valuation of a company’s inventory”
Clearly, if given the relevant assertion, there would be no marks for repeating it in the answer.
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