Revision question on audit evidence (NBAA,B3,NOV 2018)

(a)    In accordance with ISA 501: Audit Evidence – Specific Considerations for Selected Items, outline what an auditor should do:

(i)    To obtain sufficient appropriate audit evidence regarding the existence and condition of inventory where inventory is material to the financial statements.

(ii)   Where physical inventory counting is conducted at a date other than the date of the financial statements.  

(iii)  If she/he is unable to attend physical inventory counting due to unforeseen circumstances.  

(iv)   If inventory under the custody and control of a third party is material to the financial statements. 

(b)   Explain each of the five fundamental principles of the Code of Ethics and Conduct.

(c)    Direct confirmations from third parties provide independent audit evidence that certain account balances and items in the financial statements are properly recorded and disclosed.

REQUIRED:

Distinguish between positive and negative confirmations.

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