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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reporting on other assignments

Marlow & Partners is engaged to compile the financial information of Oakfield Traders, a small unlisted business, under ISRS 4410 (Revised). During the work the practitioner notices that a large supplier invoice appears to have been recorded twice. What is the practitioner's most appropriate action?

The practitioner should raise the apparent duplicate with management and ask for correction or further information, withdrawing if the information stays materially misleading. Compilation involves no assurance or verification, but ISRS 4410 (Revised) requires the practitioner to address information that appears incorrect or misleading.

  1. AObtain sufficient audit evidence on the invoice before completing the compilation
  2. BIgnore the matter because compilation involves no consideration of the accuracy of information
  3. CInclude a negative assurance statement about the supplier balance in the compilation report
  4. DDiscuss it with management and request correction or additional information, and withdraw if the information remains materially misleadingCorrect

Explanation

In a compilation the practitioner does not verify information or obtain assurance, but must consider whether the information provided appears obviously inadequate, incorrect or misleading. Here the practitioner should ask management to correct it and, failing that, consider withdrawing. Gathering audit evidence or giving negative assurance is outside a compilation.

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