CS Professional · Internal and Forensic Audit · Practices related to Internal Auditing
During a supervisory review of working papers at Ganga Retail Ltd, the audit manager finds that a senior auditor's conclusion on inventory controls is not supported by any test evidence on file. What should the manager do first?
The manager should require the auditor to obtain and document sufficient evidence, or else revise the conclusion. Supervision exists to ensure conclusions are supported by documented, reliable evidence; experience or verbal auditee assurance is not a substitute, and simply deleting the finding ignores the deficiency.
- ARemove the conclusion and issue the report without it
- BRequire the auditor to obtain and document sufficient evidence, or revise the conclusionCorrect
- CAccept the conclusion because the auditor is experienced
- DRely on the auditee's verbal confirmation instead
Explanation
Supervision ensures that conclusions rest on sufficient, reliable, relevant and useful evidence documented in working papers. The manager should have the evidence obtained and documented or the conclusion revised. Seniority or verbal confirmation is not adequate support.
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