CL22-P1 Reviews exercise (CHP 20)

SG Motor Cars Co (PSG) manufactures a range of motor cars, and its year end is 30 June 2020. You are the assistant audit manager of Intermiami & Co and are currently preparing the audit programmes for the year-endaudit of PSG. You have had a meeting with your audit manager, and he has notified you of the following issues identified during the audit risk assessment process:Land and buildingsPSG has a policy of revaluing land and buildings; this is undertaken on a rolling basis over a five-year period. During the year PSG requested an external independent valuer to revalue a number of properties, including awarehouse purchased in January 2020. Depreciation is charged on a straight-line basis.Work in progressPSG undertakes continuous production of cars, 24 hours a day, seven days a week. An inventory count is to be undertaken at the year end and Intermiami & Co will attend. You are responsible for the audit of work inprogress (WIP) and will be part of the team attending the count…

PSG Motor Cars Co (PSG) manufactures a range of motor cars, and its year end is 30 June 2020. You are the assistant audit manager of Intermiami & Co and are currently preparing the audit programmes for the year-endaudit of PSG. You have had a meeting with your audit manager, and he has notified you of the following issues identified during the audit risK assessment process: Land and buildingsPSG has a policy of revaluing land and buildings; this is undertaken on a rolling basis over a five-year period. During the year PSG requested an external independent valuer to revalue a number of properties, including awarehouse purchased in January 2020. Depreciation is charged on a straight-line basis. Work in progressPSG undertakes continuous production of cars, 24 hours a day, seven days a week. An inventory count is to be undertaken at the year end and Intermiami & Co will attend. You are responsible for the audit of work inprogress (WIP) and will be part of the team attending the…

John Josephs an audit manager for Tip, Acanoe & Tylerto, was asked to speak at a dinner meeting of the local Small Business Administration Association. The president of the association has suggested that he talk about the various phases of the audit process. John has asked you, his trusted assistant, to prepare an outline for his speech. He suggests that you answer the following. Required: A) List and describe the various phases of an audit. B) Describe how audit procedures designed for one purpose might provide evidence for other purposes. Give an example. C) One of the phases involves understanding an entity's internal control. Why might the members of the association be particulary interested in the work conducted by auditors in this phase of the audit?

During an audit class, a student suggests that it might be more cost effective if auditors always set Control Risk at Maximum and then perform the planned substantive tests to collect audit evidence.  In which of the following clients audits would the student's suggestion be incorrect (must choose one of the three possible choices), if the audit is performed according to the AICPA auditing standards? A) a not for profit charity organization B) a wall street company C) a membership-only company

During an audit class, a student suggests that it might be more cost effective if auditors always set Control Risk at Maximum and then perform the planned substantive tests to collect audit evidence.  In which of the following clients audits would the student's suggestion be incorrect if the audit is performed according to the AICPA auditing standards? A) A not for profit charity organization B) A Wall Street Company C) A membership-only company

During the audit of Company XYZ, John Doe, the plant manager tells you that the company purchased and an equipment at the beginning of the year that is currently being used in the factory.  The equipment was recorded at cost. The manager asks you, now that we are using the machine in our production do we need to any additional accounting for the machine?   Using the related GAAP and prepare a memo to the president that summarizes how to record, and the machine used in the factory.

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…

This discussion will consist of an interview with an industry expert in the field of auditing. You have two options: Select an expert from the list given to you by your instructor or Select an expert of your choice If you select an expert from the list, verify the mentor with your instructor to make sure that every student is not interviewing the same person. Alternatively, if you choose an expert, confirm your selection with your instructor. Pick any three of the following interview questions for your interview (interviews can occur over email or phone): What are the in-demand skills that an auditor must have to be successful?  Have you ever personally found fraud as an auditor? How did you handle the situation? What do you like most about your career as an auditor? How are ChatGPT and similar AI tools affecting the auditing profession? What professional certifications would you suggest an auditor earn? What internal controls have you found to be the most effective? What types of…

Analyze the relationship among risk, opportunity and controls: Craig learns that one of the employees has been doing snow plowing jobs on the side with the company equipment.  Discuss both the financial and legal impacts for the company.  What are the financial and legal risks to the company? Also, discuss at least two (internal) controls could be put in place to detect/deter this activity.

Mr. Arty works for Smile Accounting Firm as a senior accountant. Currently, he is doing a review of rental property compliance testing of rental receipts and expenses of the property owned by the client. He determines that the staff accountants tested only two tenants per property, instead of the three required by the audit program based on materiality considerations. However, to request more information from the client would cause massive delays, and the manager on the engagement is pressing hard for the information now. The manager did approach the client, who stated that she “needed the report yesterday.” The manager reminds Arty that no problems were found from the testing of the two properties, in past years the workpapers called for just two properties to be reviewed, the firm has never had any accounting issues with respect to the client, and he is confident the testing is sufficient. Explain the relationship between the manager’s explanations and the judgment tendencies.

On 1st May, 2024 you are engaged to audit the financial statement of Giant Pharmacy for the period ending 30th December 2023. The Pharmacy is located at Mgeni Nani at the outskirts of Mtoni Kijichi in Dar es Salaam City. Materiality is judged to be TZS. 200,000/=. During the audit you found that all tests produced clean results. As a matter of procedures you drafted an audit report with an unmodified opinion to be signed by the engagement partner. The audit partner reviewed your file in October, 2024 and concluded that your audit complied with all requirements of the international standards on auditing and that; sufficient appropriate audit evidence was in the file to support a clean audit opinion. Subsequently, an audit report with an unmodified opinion was issued on 1st November, 2024. On 18th January 2025, you receive a letter from Dr. Fatma Shemweta, the Executive Director of the pharmacy informing you that their cashier who has just absconded has been arrested in Kigoma with TZS.…

A division of your company purchased a large quantity of new desktop computers during the current fiscal year. An internal audit manager has asked you to audit the process used to acquire the computers. He also wants you to determine whether the computers have been used properly and accounted for correctly. The manager specified a set of audit objectives to guide your tests. For example, he wants you to determine whether: (1) The purchases of the computers were properly authorized. (2) Responsibilities regarding the computers were properly segregated. (3) The computers, as well as the software and information they contain, are properly safeguarded. Consider both physical and logical access。 (4) Laws and regulations regarding software usage have been complied with. (5) The computers recorded as being purchased actually exist. (6) All of the computers that were purchased have been recorded. (7) The amounts at which the computers are recorded are correct. (8) The estimated useful lives…

Describe SIX audit risks, and explain the auditor's response to each risk, in planning the audit of Blister Pharmaceuticals Co. Prepare your answer using two columns headed Audit risk and Auditor's response respectively.