Skip to main content

Nayan explaining the concept of reasonable assurance, and how reasonable assurance is determined.

By

 Unit Name: Audit, Assurance and Compliance Assignment

Question 1 - Week 1 (7 marks)
You have recently graduated from your university course and start work with an audit firm. You meet an old school friend, Nayan, for dinner — you haven't seen each other for several years. Nayan is surprised that you are now working as an auditor because your childhood dream was to be a ballet dancer. Unfortunately, your knees were damaged in a fall, and you can no longer dance. The conversation turns to your work, and Nayan wants to know how you do your job. Nayan cannot understand why an audit is not a guarantee the company will succeed. Nayan also thinks that company managers will lie to you in order to protect themselves. As an auditor, you would have to assume that you cannot believe anything a company manager says to you. Required:
(a) Write a letter to Nayan explaining the concept of reasonable assurance, and how reasonable assurance is determined.Explain why an auditor cannot offer absolute assurance (3 marks). (200 -250 words)
(b) Explain in the letter to Nayan the concept of 'professional scepticism' and how it is not the same as assuming that managers are always trying to deceive auditors (4 marks). (150- 200 words)
Question 2 - Week 3 (7 marks)
Liona is the managing partner of Ross and Associates, a small audit firm. Liona's role includes managing the business affairs of the firm, and she is very worried about the amount of fees outstanding from audit clients. Broomers Pty Ltd, one of the client of Ross and Associates, has not paid its audit fees for two years despite numerous discussions between Liona, their audit partner Ball, and the management of Broomers Pty Ltd. Broomers Pty Ltd's management has promised the fees would have been paid before the audit report for this year has been published, Liona rang Ball this morning to ensure that the audit report was not issued because Broomers Pty Ltd had paid only 10 per cent of the outstanding account. She discovers that Ball is about to sign the audit report.
Required:
(a) Explain the ethical problem in this case. Why is it a problem? (4 marks). (150 – 200 words) (b) What can be done about it? (3 marks) (50 – 100 words)
Question 3 - Week 4 (7 marks)
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current year, the business has consistently paid its suppliers late, well in excess of the suppliers' normal credit terms. This has resulted in some suppliers requesting cash on delivery from the business. The auditor has reviewed the correspondence between the business and its bank and finds that the business has been experiencing cash flow problems for two years.
Required:
(a) Explain why determination of materiality is a matter of auditor judgment. Refer to both qualitative and quantitative materiality assessments (2 marks). (150 - 200 words)
(b) Explain whether (and, if so, how) the information provided impacts on the auditor's assessment of preliminary materiality (5 marks). (250 - 300 words)
Question 4 - Week 6 (7 marks)
(a) What are the auditor's responsibilities for 'going concern assumptions’'? (2 marks) (250 - 300 words) (b) Maxim Stewart is the partner in charge of the audit for a new client, Southern Southerland (SS). The client engaged Maxim's audit firm in November 2017, in preparation for the 2018 audit. From 30 January 2018 onwards, SS has consistently paid its suppliers late, well in excess of the suppliers' agreed credit terms. This has resulted in some suppliers demanding cash on delivery from SS. Maxim is also aware from his review of correspondence between SS and its bank that the company has been experiencing cash flow problems since 2016. Required: Identify any significant events or conditions that individually or collectively may cast significant doubt on SS's ability to continue as a going concern (5 marks) (290 - 320 words)
Question 5- Week 10 (11 marks)
Jonas Worth is the engagement partner for the financial report audit of Caufield Ltd for the year ended 31 December, 20X7. The following material events or transactions have come to Wood's attention before he is scheduled to issue his report on 28 February, 20X8.
a) On 3 January, 20X8, Caufield Ltd received a shipment of raw materials from korea. The materials had been ordered in October 20X7, and shipped FOB shipping point in November 20X7 (2.5 marks). (50 -80 words)
b) On 15 January, 20X8, the company settled and paid a personal injury claim of a former employee as the result of an accident that occurred in March 20X0. The company had not previously recorded a liability for the claim (2.5 marks). (50 -80 words)
c) On 25 January, 20X8, the company agreed to purchase for cash the outstanding shares of La Trobe Electrical Ltd. The acquisition is likely to double the sales volume of Caufield Ltd (3 marks) (50 -80 words) d) On 1 February, 20X8, a plant owned by Caufield Ltd was damaged by a flood, resulting in an uninsured loss of inventory (3 marks) (50 -80 words)
Required: For each of the above events or transactions, discuss audit procedures that should have brought the item to the auditor's attention, and indicate the treatment required in the financial report. Give reasons for your decision.
Client Accounting Treatment Justification

Comments

Post a Comment

Popular posts from this blog

Starting with this provided code, add the following functionality

By
1.Starting with this provided code, add the following functionality: Replace hardcoded strings “Zero”, “One”, “Two”, “Three” in the ArrayList based on user typed input (use Scanner or JOptionPane classes). The user will be prompted for the String to be stored in the ArrayList and then hit enter. The user will be able to continue to add items to the ArrayList until they just hit enter without typing anything. Once the user does this (hits enter without typing anything), the program will display all of the elements of the ArrayList, both the index and String values, in a table. It will do this via a single loop making use of an iterator method. 2. Starting with this provided code, add the following functionality: Use a Try/Catch block so that the exception is caught and the program exits a bit more gracefully. Save this file as TryCatch.java. (Be sure to rename the Public Class accordingly.) Starting with the provided code again (without the Try/Catch block), fix the code so that
2 comments
Read more

Josie Eskander

By
  Question 1: Task 1: Report Assume you are Josie Eskander. You are writing in response to techno trading P/L’s advertisement of a new laptop at 20% below normal price. You want information on brand name, availability of service and repairs, delivery times and methods of payment. Write the letter using the seven basic parts of the letter. In the opening paragraph present a clear and courteous request. Secondly write a response from techno trading giving details and proposing the sale. Provide draft of both emails in the space below. Question 2: Task 2: Report In pairs, nominate a good and a bad letter writer. Discuss the key differences. Write a good/bad letter from techno training to Alex Antonov accepting/declining his proposal to invest in the business Question 3: Task 3: Report Write a letter from techno trading p/l to a new client ‘new realities p/l’ urging them to buy techno new virtual reality software. Make a strong argument for the product. Question 4: Task 4: Report Write a l
Post a Comment
Read more

THE AMERICAN REVOLUTION AND THE EARLY REPUBLIC

By
Assignment Overview The American Revolution and Independence As we saw in the Module Overview, there were numerous factors that ultimately led to revolution and independence. In this second Case assignment, you’ll be researching and writing about some of those factors. Case Assignment Write a 3 to 4-page essay identifying at least FOUR factors which led to colonial independence. In your paper, explain which events triggered discord between the colonies and the Mother Country. Be sure to do some research on your own and use other resources to analyze the thought-processes which sparked independent thinking. The best way to approach and organize the paper would be to create a title for each event and then discuss your findings. For example; for the first one you could write, “Event 1, The Seven Years War”. This would be followed by your narrative on how this war led to independence. The rest of the paper would follow this pattern. Assignment Expectations Use concepts from the background
Post a Comment
Read more