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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Sustainability Audit, ESG Rating and Emerging Mandates from Government and Regulators

During a sustainability audit at Saraswati Cement Ltd, the auditor compares reported water consumption with utility bills, meter logs and plant records to confirm the figure. Which audit technique is mainly used?

The auditor is using vouching and corroboration. Reported water use is tested against utility bills, meter logs and plant records to obtain sufficient appropriate evidence. Liquidity ratios, cash forecasts and proxy appointments serve different purposes and do not verify the reported figure.

  1. AVouching and corroboration with external and internal evidenceCorrect
  2. BRatio analysis of liquidity
  3. CForecasting of cash flows
  4. DAppointment of a proxy

Explanation

Comparing a reported figure with bills, meter logs and records is gathering corroborative evidence, a form of vouching and verification. Liquidity ratio analysis and cash flow forecasting address financial position, and proxy appointment relates to meetings.

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