8.2 relationship

Question 1

relationship between risk assmnt, nature, timing and extent of subs. prdrs

Answer 1

1.Nature of subs. prdrs varries from acc to acc as it depends on the nature of the acc but also on the risk assmnt of th specific acc and client overall.

2. involves test of details and analytical prdrs
3. NTE of subs prdrs are responsive to risk assmnt for each specific acc

e.g for expenses risk related to completeness greater than existence thus will direct adt prdrs towards testing completeness assertion. this also determine timing e.g some prdrs carried out during interim visits

Question 2

relationship between risk assmnt, nature, timing and extent of subs. prdrs

Answer 2

1. timing depends hugely on the assurance provided by control testing
2. generally subs. prdrs performed at year end and control testing at interim
3. for acc that accummulate trsn, adt prdrs can be done prior to year end. this is because generally the trsns remain in the acc at year end and their adt prdrs do not depend on CR and IR
4. provides flexibility to adtr as more work are performed before year end

Question 3

relationship between risk assmnt, nature, timing and extent of subs. prdrs

Answer 3

5. for other acc timing of sibs. prdrs depend on IR and CR

6.timing is most flexible when controls assessed and tested effcetive. subs adtr can occur 6 months earlier before year en

7. when controls only assessed effective, the subs. prdrs can happen 3-4 months before year end
8. when subs prior to year end, adtr will use roll forward prdrs- adt prdrs to gather evidence that interim testing results still applied at year end. this padre occurs during interim and year end
9. extent and nature of roll forwards depends on professional judgement and they are responsive to risk assmnt