When substantive tests performed identify errors or exceptions,the auditor's first response is to:
A)understand why the exception or error has arisen.
B)qualify the audit report.
C)report the client to ASIC.
D)None of the above

Question

Quizplus · Accepted Answer

The auditor's first response should be to understand why the exception or error has arisen. This will allow the auditor to determine the appropriate audit response and assess any potential impact on the financial statements. Qualifying the audit report or reporting the client to ASIC should only be considered after a thorough understanding of the error or exception has been obtained.

When Substantive Tests Performed Identify Errors or Exceptions,the Auditor's First