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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Audit-related and assurance services

Tarn & Co is performing agreed-upon procedures for Solace Ltd. One agreed procedure is to confirm 20 specified customer balances directly with customers. For three of the customers no reply is received after a follow-up request and the engagement terms do not provide for alternative procedures. What should the practitioner do?

Tarn should report the non-responses as a factual finding against the confirmation procedure. Alternative procedures may be performed only if agreed with the engaging party. The practitioner should not unilaterally substitute procedures or draw conclusions about misstatement, because an AUP report states facts, not conclusions.

  1. APerform alternative procedures on those balances of the practitioner's own choosing and report them as if they were agreed
  2. BWithdraw from the engagement because the procedure could not be fully completed
  3. CReport the factual finding that no replies were received, describing the procedure and the exception without substituting other procedures unilaterallyCorrect
  4. DTreat the non-replies as misstatements and propose an adjustment to the receivables balance

Explanation

The practitioner reports only on procedures agreed. Where a procedure cannot be completed, the fact is reported as a finding, and any alternative procedures must be agreed with the engaging party. Withdrawal is unnecessary, and concluding there are misstatements would go beyond factual reporting.

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