Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Completion and final review

During the final review of the audit of Larkspur Co, the audit senior notes that misstatements found during the audit were individually below the clearly trivial threshold set at planning. Which treatment is consistent with ISA 450 for these items?

Misstatements that are clearly trivial do not have to be accumulated under ISA 450. The auditor sets a clearly trivial threshold at planning, and items below it are inconsequential, so they are neither accumulated nor individually communicated to those charged with governance.

  1. AThey need not be accumulated, as clearly trivial matters are not misstatements for accumulation purposesCorrect
  2. BThey must be accumulated and each one communicated to those charged with governance
  3. CThey must be corrected by management before the audit report can be signed
  4. DThey should be treated as material if there are more than three of them

Explanation

ISA 450 requires the auditor to accumulate misstatements identified during the audit, except those that are clearly trivial. Items below the clearly trivial threshold are therefore not accumulated or communicated. The option requiring accumulation and communication of each one is wrong because it ignores the exemption for clearly trivial items.

Did you get it right without looking?

One question tells you little. A timed set on Completion and final review shows your real accuracy, how long you take and where you lose marks.

Practise Completion and final reviewFree diagnostic mock

More Completion and final review questions