- 5 Marks
AAA – April 2022 – L3 – Q5b(i) – Audit evidence, Professional responsibility and liability
Describe substantive procedures to address a cut-off error in the purchase ledger.
Question
Asogli has been in existence since 2005, operating a car repair and servicing business. The car service solutions offered to its clients are diagnosis, ECU programming, key programming, body works, electrical works, and air conditioning. Its year-end was 31 October 2020. You are the senior audit manager of KK and Associates, the Auditor of Asogli. The audit is due to commence, and Asogli intends to sign the audit report on 20 November 2020.
Your attention has been drawn to the following matter by the Partner-in-charge:
- Cut-Off Error:
Asogli’s Finance Director has notified you that an error occurred in closing the purchase ledger at the year-end. Rather than closing on 31 October, it accidentally closed one week earlier on 24 October. All purchase invoices received between 25 October and the year-end have been posted to the 2021 year-end purchase ledger.
Required: Describe substantive procedures you would perform to obtain sufficient and appropriate audit evidence in relation to the above. (5 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Audit evidence, Cut-Off Errors, Substantive Procedures
- Level: Level 3
- Topic: Audit evidence, Professional responsibility and liability
- Series: APR 2022
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