ACCA Audit and Assurance (F8) Practice Exam

What is a fundamental procedure to perform if there are doubts over written representations?

1. Change the audit strategy

2. Perform additional verification procedures

3. Immediately escalate to legal counsel

4. Ignore the doubts

The correct answer is: Perform additional verification procedures

When there are doubts over the validity or reliability of written representations obtained from management during an audit, performing additional verification procedures is a fundamental step to ensure the integrity of the audit findings. Written representations are often used by auditors as part of their evidence-gathering process; however, they alone are not sufficient, as they originate from management and may be biased. By undertaking further verification procedures, the auditor can seek corroborative evidence from other sources. This may include examining underlying documentation, performing analytical procedures, or obtaining confirmations from third parties. These additional procedures serve to either confirm or potentially refute the assertions made in the written representations, thereby enhancing the overall reliability of the audit evidence. This approach aligns with the principle of gathering sufficient appropriate audit evidence to conclude on the financial statements as a whole, particularly when doubts arise. It ensures that the auditor maintains an appropriate level of professional skepticism and rigor in the audit process.