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.

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.