ACCA Strategic Professional · Advanced Audit and Assurance (International) · Audit-related and assurance services
Orlin & Co is performing agreed-upon procedures for Pell Ltd on its export sales. The procedure is to agree the invoice value of 25 selected sales to customs documents. The practitioner finds that 4 of the 25 differ in amount. The client's finance director asks that the differences be omitted from the report because the lender 'only needs the overall picture'. Which response is correct?
The practitioner must report all exceptions as factual findings for the procedure performed, and consider withdrawing if the client will not allow it. Under ISRS 4400 (Revised) the report describes findings and expresses no opinion, so concealing differences or calling them immaterial would be inappropriate.
- AOmit the differences, as the engaging party determines the content of the report
- BReport the exceptions as factual findings, because the report must describe the findings from each procedure, and withdraw if the client does not allow thisCorrect
- CReport the differences but state that they are immaterial to the financial statements
- DConvert the exceptions into a qualified opinion on export sales
Explanation
ISRS 4400 (Revised) requires the report to set out the factual findings of each procedure, including exceptions. The practitioner does not apply materiality to exclude findings and gives no opinion to qualify. If the client restricts reporting, the practitioner considers withdrawal.
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