ISA 510 requirements

1 mark per principal audit procedure (to max 2):

– Read prior year financial statements
– Determine whether brought forward correctly
– Determine whether appropriate accounting policies applied to opening balances
– Specific procedures on certain items e.g. if risk of material misstatement
– Review for consistency of accounting policies in current period

1 mark per procedure specific to opening inventory (to max 6):

– Review records of prior year inventory count
– Reconcile results of current year inventory count back to opening balances
– Analytical procedures on gross profit
– Sales value confirmation for items in opening inventory
– Discussion with management re any inventory write offs relevant to opening balances
– Review of management accounts for any inventory write offs relevant to opening balances
– Analytical procedures such as inventory turnover periods

Maximum marks 8