Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Audit Engagement, Audit Program, Audit Documentation and Audit Evidence

Midway through an audit, Sundaram Traders Ltd asks the auditor to convert the engagement to a review engagement because the auditor cannot obtain sufficient appropriate audit evidence on receivables, and the audit program on receivables remains incomplete. How does SA 210 view this request?

The request is not reasonable. SA 210 says a change may not be considered reasonable when it relates to unsatisfactory information, for example when evidence on receivables cannot be obtained and the entity seeks a review engagement to avoid a qualified opinion or disclaimer of opinion.

  1. AReasonable, as long as the fee is reduced
  2. BReasonable, because management can choose the type of engagement at any time
  3. CReasonable only if the audit program is rewritten
  4. DNot reasonable, as the change appears to be aimed at avoiding a qualified opinion or a disclaimer of opinionCorrect

Explanation

SA 210 gives this exact situation as an example of a change that may not be considered reasonable: where the auditor cannot obtain sufficient appropriate evidence on receivables and the entity asks for a review engagement to avoid a qualified opinion or disclaimer. Rewriting the program or lowering the fee does not alter this.

Did you get it right without looking?

One question tells you little. A timed set on Audit Engagement, Audit Program, Audit Documentation and Audit Evidence shows your real accuracy, how long you take and where you lose marks.

Practise Audit Engagement, Audit Program, Audit Documentation and Audit EvidenceFree diagnostic mock

More Audit Engagement, Audit Program, Audit Documentation and Audit Evidence questions