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Sahil asked 1 year ago

Can you please explain the written representation part of answer? 
Since the financial statements were audited, reliance may be placed on audited figures in ordinary circumstances. There is nothing in question which indicated that ordinary circumstances does not exist.  
Why shall the auditor be held liable for not exercising due diligence, when he just relied on Audited FST? 

1 Answers
RaviRavi Staff answered 1 year ago

Auditor is required to follow procedures as per SA 510 for opening balance, even if there is no change in opening & closing
In question is says that auditor has removed examination of accounts receivable from audit programme, this is in correct
further he is simply relying on affirmations (most probably oral representations) he is suppose to take written representation and even after taking that he is suppose to perform audit procedures for accounts receivable as WR in itself is not sufficient & appropriate evidence, it can corroborate other evidence
so both SAs say perform procedures for accounts receivable which auditor didnt do

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