ACCA Advanced Audit and Assurance (AAA) Practice Exam

Final audits typically include which type of procedure?

1. Survey of past audit findings

2. Substantive procedures for account balances

3. Evaluation of interim audit conclusions

4. Client satisfaction surveys

The correct answer is: Substantive procedures for account balances

Final audits are crucial stages in the audit process, focusing on the financial statements of an entity at the end of a reporting period. Substantive procedures for account balances play a central role in final audits as they are designed to detect material misstatements in financial statements. These substantive procedures can include tests of details, which involve verifying transactions and balances, and analytical procedures, which assess financial information through comparisons and ratios. This type of procedure is vital because it provides the auditor with direct evidence about the correctness of the financial information presented, thus ensuring the overall reliability of the financial statements. Accurate account balances are essential for forming an appropriate audit opinion, which is why substantive procedures are emphasized in the final stages of the audit. While the other options may have their place in certain contexts, they do not specifically pertain to the core activities undertaken in final audits. For instance, surveying past audit findings or evaluating interim audit conclusions may be relevant for planning or assessing risk levels but do not constitute substantive testing of balances for the final audit. Client satisfaction surveys, on the other hand, are more aligned with assessing the service quality provided by auditors rather than a procedure directly tied to verifying financial information.