ACCA Advanced Audit and Assurance (AAA) Practice Exam

Obtaining third-party confirmations is a procedure associated with which audit phase?

1. Interim audits

2. Final audits

3. Planning audits

4. Preliminary assessments

The correct answer is: Final audits

Obtaining third-party confirmations is primarily associated with the final audits phase. This stage of the audit process is focused on gathering sufficient and appropriate audit evidence to support the auditor's opinion on the financial statements. Third-party confirmations are a powerful tool in this context because they provide direct evidence from external sources about specific account balances or transaction details. During the final audit phase, auditors typically request confirmations from entities such as banks, customers, and suppliers to verify amounts reported in the financial statements. This process helps establish the existence and completeness of assets and liabilities, reinforcing the reliability of the financial data presented by the entity being audited. In contrast, other phases like planning, interim audits, and preliminary assessments may involve gathering preliminary information and risk assessments, but they do not primarily focus on the substantive testing that is characteristic of final audits. Therefore, the emphasis on obtaining third-party confirmations aligns specifically with the final audit phase, where the evidence collected forms the basis for the audit opinion.