Sidhu, a PA, is planning his first audit of Microservices Ltd., a local retailer of computers and
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Because the company is small and has few employees, Sidhu decides to ignore the company’s internal controls and rely solely on substantive tests of transactions and details in this first audit engagement. Sidhu believes that this approach will allow him to perform an audit at minimum cost, and hence charge a minimum audit fee. In later years, as the client’s systems become better developed, Sidhu plans to modify his audit approach to incorporate some reliance on the client’s internal controls and thereby reduce his level of substantive testing. Before beginning the audit, Sidhu discusses this audit plan with the owner, who fully agrees with Sidhu that this is the most efficient way to proceed, given the circumstances.
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Assess Sidhu’s actions, using Canadian auditing standards.
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Related Book For
Auditing The Art and Science of Assurance Engagements
ISBN: 978-0133098235
12th Canadian edition
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Ingrid B. Splettstoesser
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