CON 7020 Overhead Should Cost Review Exam

The practice of auditing firms to spread work throughout the year by carrying out as many auditing procedures as practicable before the balance sheet date, in order to minimize the load during the peak period. This is called a. Test of recorded transactions b. Confirmation of receivable and payablesc. Observation and test-check of inventoriesd. Interim work

Consider the following material and independent situations (i) to (iii) below.In each situation, the following dates apply:• Balance date: 30 June 2021• Date of audit report: 16 August 2021• Audited financial report and audit report sent to shareholders: 23 August 2021• Annual general meeting: 30 September 2021(i) The client purchased raw materials that were received before the financial year end. The purchase was recorded based on its estimated value. The supplier’s invoice, received on 30 July 2021, showed that the cost was substantially different from the estimated value.(ii) On 10 August 2021, the directors signed a contract to upgrade the client’s airconditioning system. The first payment of $100,000 is due on 1 September 2021. Work will be completed by 30 June 2022, and the final contract payment will be made at that time.(iii) On 25 August 2021, the general manager informed you that on 18 August 2021 the directors decided to sell land that the client was holding as a long-term…

The Sarbanes-Oxley Act (SOX) requires that an auditor must issue an internal control report following the evaluation of internal controls. provide continuous consulting services to help prevent fraud. issue a sustainability report along with the internal control report. rotate who can lead an audit every three years.

Jack Motors manufactures a range of motor cars and its year end is 31* January 2019. You are the audit supervisor of Ayeyi & Partners and are currently preparing the audit programmes for the year-end audit of Jack Motors. You have had a meeting with your audit manager and he has notified you of a number of issues identified during the audit risk assessment process. Land and buildings Jack Motors have a policy of revaluing land and buildings, this is undertaken on a rolling basis over a five-year period. During the year Jack Motors requested an external valuer to revalue a number of properties, including a warehouse purchased in May 2018. Depreciation is charged on a pro rata basis. Work in progress Jack Motors undertakes continuous production of cars, 24 hours a day, and seven days a week. An inventory count is to be undertaken at the year end and Ayeyi & Partners will attend. You are responsible for the audit of work in progress (WIP) and will be part of the team attending the count…

The following is a potential activity undertaken by management during the preparation of financial statements. - "Assessment of the 12 months projected information of the entity" Which assumption/consideration for a fair presentation of the financial statements matches the activity? Select the correct answer. Consistency Offsetting Going concern Accrual basis

Which of the following is true with respect to PCAOB inspections of accounting firms?a. All firms performing audits of public companies are required to have annual inspectionsconducted by the PCAOB.b. PCAOB inspections review a sample of audits conducted by firms as well as the firm’ssystems of quality control.c. All results of PCAOB inspections are made available to the public following the inspection.d. Firms performing audits of 100 or fewer public entities may elect to have a peer reviewconducted through the AICPA in lieu of a PCAOB inspection.

Many diverse types of entities undergo audits. Provide three reasons for each of the following types of entities to undertake an annual audit, and indicate the types of benefits they would receive from an audit:   Entities Types of entities Types of benefits a Food  for the Students charity 1. 2. 3. b BHP Billiton Nickel West Pty Ltd public company 1. 2. 3. c Canterbury League Club Club 1. 2. 3. d City of Canterbury-Bankstown Council Municipal government   1. 2. 3.

Differentiate among the different types of professional engagements. Assume you are auditing a city with a summer youth employment program. List some factors you might investigate in terms of (1) financial statement audits and (2) performance audits. Ans both

Analytical procedures are useful at the planning stage for risk assessment. Using analytical procedures and the following extracts from the draft financial statements of an audit client, identify THREE areas which you believe require further investigation, explaining your reasons.                                                           2020(draft)              2019(audited)                                                                 £                                    £ Sales                                               7,765,000                      5,974,500 Cost of Sales                                 5,823,750                      4,779,600 Gross Profit                                    1,941,250                      1,194,900 Depreciation                                    269,800                         257,900 Salaries                                             680,000                        645,000 Repairs and maintenance costs     328,000…

Client Name:  The Boeing Company Entity and Environment Category:  Objectives, Strategies, and Business Risks Year ended:    Completed by:   Reviewed by: Business Risk Factor Response Possible Effect(s) on the Audit Does the entity set entitywide objectives and are they supported by strategic plans?     Does the entity have clear objectives in terms of a budget, profit, and other financial and operating goals?     Does the entity have an entity risk assessment process that includes estimating the significance of the risks, assessing the likelihood of their occurring, and determining the actions needed to respond to the risks?

Case Study: Auditor's Responsibility for Non-Financial Information As an experienced auditor at a reputable accounting firm, you've been assigned to audit a large manufacturing company's financial statements. In addition to financial data, the company also discloses non-financial information related to sustainability, environmental impact, and social responsibility in its annual report. Your audit team is tasked with evaluating the reliability and accuracy of both financial and non-financial information to provide stakeholders with a comprehensive understanding of the company's performance and operations. During the audit process, you implement various procedures to fulfill your responsibility for auditing non-financial information: 1. Understanding Non-Financial Reporting Frameworks: Begin by familiarizing yourself with relevant non-financial reporting frameworks and standards, such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB). These…

Image to the questions is attached below. Questions 1.Using the information provided, identify and describe five audit risks, and explain the auditor's response to each risk, and in planning the audit if Fizzyco. 2. Describe the substantive procedures the audit team should perform to obtain sufficient and appropriate audit evidence about the following three matters: a. The treatment of the £5 million expenditure incurred on improving the factory production process; b. The release of the £1.5 million allowances for receivables; and c. The damage inventory. 3. Define a 'test if controls' and provide three examples of test of controls in relation to the audit and sales receivables. 4. Define a 'substantive procedure' and provide three examples of substantive procedures in relation to the audit and sales receivables.