Day: October 19, 2026

The result of a substantive audit test at Alex Manufacturing Ltd is set out below.

The materiality threshold set for substantive tests was £1,000.

For the result below, select the action to be taken by the audit senior.

• An arithmetical misstatement of £5,000 found

Select ONE answer:

1. Refer to a senior colleague
2. Redo the substantive test
3. Draw conclusion
4. Extend sample

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – An arithmetic misstatement of £5,000 found would be above the materiality threshold and so the auditor should extend his sample.

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