CASE STUDY

As lead auditor to audit Zigzag Company Limited's financial statements, you have the

responsibility of instructing the team on matters relevant to conducting an audit under the theme,

'Auditors should obtain sufficient appropriate evidence to be able to draw reasonable conclusions

on which to base their opinion.'

A. Refer to the theme in a discussion on how much auditors can rely on confirmation from

third parties. Provide FOUR (4) examples, other than debtors' circularisation, of how

confirmation might be obtained. (10 marks)

B. Explain how auditors would assess sufficiency and appropriateness of a file of sales

invoices as evidence for the credit sales figure in the income statement. (10 marks)

(Total 20 marks)