ACCA Strategic Professional · Advanced Audit and Assurance (International) · Audit procedures and obtaining evidence
An audit firm plans to use a third-party automated tool, not developed by the firm, to analyse client transaction data. Under ISA 220 (Revised) on quality management for an audit, which is the engagement partner's responsibility regarding the tool?
The engagement partner must be satisfied the tool is suitable for its intended purpose and used in line with firm policies, since the partner retains overall responsibility for engagement quality. Third-party tools are allowed, but reputation of the vendor or reliance on the client does not remove that responsibility.
- ABe satisfied that the tool is appropriate for its intended purpose and that its use complies with firm policies and the engagement's needsCorrect
- BAvoid using the tool because only software built by the firm may be used on audits
- CDelegate all responsibility for the tool's suitability to the client's IT department
- DUse the tool without evaluation since the vendor is reputable
Explanation
ISA 220 (Revised) requires the engagement team to use technological resources appropriately, in line with firm policies, and the partner takes responsibility for overall quality. Using a third-party tool is permitted but requires consideration of its suitability, and responsibility cannot be passed to the client or assumed from vendor reputation.
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