Question

If an external​ auditor's client has used a service organization during the year for some of its payroll processing and​ accounting, which of the following steps should the external auditor take if he or she decides to use the service organization​ auditor's report as audit evidence that the​ entity's controls are operating effectively for certain​ assertions?

Doubleminus−date

A.the audit report to show the date of the service​ organization's audit and the date of the​ client's audit.

B.Consider the sufficiency and appropriateness of the evidence provided by the service​organization's auditor's report about the effectiveness of controls intended to prevent or detect material misstatements in the particular assertions.

C. Reminus−perform each of the audit tests used by the service organization auditor.

D.The auditor should make reference to the report of the service auditor as a​ basis, in​ part, for his or her own opinion on the​ entity's financial statements.

Answer 1

The correct steps are:-

_{B.Consider the sufficiency and appropriateness of the evidence provided by the service​organization's auditor's report about the effectiveness of controls intended to prevent or detect material misstatements in the particular assertions.}

_{C. Reminus−perform each of the audit tests used by the service organization auditor.}

_{The point A is relevant where there is a change in date and The point D we should not give reference of service auditors report unless required by Law. In case if required by law then we should inclue after taking the permission of Service Auditor and also it is clearly stated that the User/External auditor will still be held}

_{responsible for his duty for sufficiency and appropriateness of the evidence.}

_{Hope i was able to help. Thanks :)}