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Hi Sir,
I was reading ACCA’s technical article that student must write complete procedure to gain full marks, like there should be a procedure + the reason + assertion in each of whole procedure, example from ACCA website is bellow,
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“A complete audit procedure would read as follows:
The auditor will agree a sample of items from the inventory sheets to the raw material inventory (1) to ensure that the inventory recorded on the sheets actually exists (2). This will confirm the assertion of existence of inventory as an asset in the financial statements (3).(1 = the audit procedure; 2 = the reason for the audit procedure; 3 = the assertion).”
—————————————————————–I am able to link procedures like inspecting document or asset to an assertion but not able to do for following. Under which assertion does procedures like these will go?
-Obtaining written representation
-Discuss with management
-Review board minutesMy second question is why there are nowhere such structured procedures shown in answers of ACCA past exams or in any of the kits?
Thank you.
These are very general procedures and could be used to collect evidence about many assertions for many figures in the FS.
Foe example:
Written representations: all liabilities are included (completeness); depreciation rates enough to write of NCAs over their estimated useful lives (valuation).
Similarly discussion with management and the review of board minutes eg the board has decided to close down a factory (valuation of assets/completeness of liabilities for closure costs) or the board believes that a lease if an finance lease (disclosure and presentation).
I don’t know why neither the examiner’s answers nor the publishers’ answers to not take more care to cover these three requirements.
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