1.Compile a working paper indicating all relevant information that should be included in the working paper. In your design and compilation of the working paper ensure that include the following elements:Audit Objective:Sample:Audit Procedures:Testing workings and results:Conclusion: An audit of trade receivables (debtors) has just been completed and the following informationis on file:Jane Motha, a junior internal auditor, evaluated trade receivables (debtors) of Plastic DesignsLtd. The purpose of the audit was to review the adequacy and effectiveness of internal controlsover outstanding debts. A sample of 30 debts was reviewed by Jane Motha on 15 August2021. The sample was randomly selected from a population of 80 outstanding invoices for theperiod 01 June 2020 to 30 June 2021. Jane enquired from the financial manager whethermeasures were taken to follow-up on outstanding debts. In addition, confirmation ofcreditworthiness report for the sample selected was inspected to ensure that only qualifyingcustomers are granted credit.Out of a sample of 30 debts, a total of 20 customers were not assessed for creditworthinessand follow-up on outstanding debts was not done for all invoices tested. This caused PlasticDesigns Ltd to write-off a total of R3 million on bad debts. The controls over outstanding debtsare ineffective and a finding is raised. Nkosinathi Kwena, a senior internal auditor gave Janereview notes on her working paper (TRWP001) on 20 August 2021.

Audit working papers are the properties of the auditors which is not to be shared by the auditor…

1.Compile a working paper indicating all relevant information that should be included in the working paper. In your design and compilation of the working paper ensure that include the following elements: Audit Objective: Sample: Audit Procedures: Testing workings and results: Conclusion:

1.Compile a working paper indicating all relevant information that should be included in the working paper. In your design and compilation of the working paper ensure that include the following elements: Audit Objective: Sample: Audit Procedures: Testing workings and results: Conclusion:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1.Compile a working paper indicating all relevant information that should
be included in the working paper. In your design and compilation of the
working paper ensure that include the following elements:
Audit Objective:
Sample:
Audit Procedures:
Testing workings and results:
Conclusion:

An audit of trade receivables (debtors) has just been completed and the following information
is on file:
Jane Motha, a junior internal auditor, evaluated trade receivables (debtors) of Plastic Designs
Ltd. The purpose of the audit was to review the adequacy and effectiveness of internal controls
over outstanding debts. A sample of 30 debts was reviewed by Jane Motha on 15 August
2021. The sample was randomly selected from a population of 80 outstanding invoices for the
period 01 June 2020 to 30 June 2021. Jane enquired from the financial manager whether
measures were taken to follow-up on outstanding debts. In addition, confirmation of
creditworthiness report for the sample selected was inspected to ensure that only qualifying
customers are granted credit.
Out of a sample of 30 debts, a total of 20 customers were not assessed for creditworthiness
and follow-up on outstanding debts was not done for all invoices tested. This caused Plastic
Designs Ltd to write-off a total of R3 million on bad debts. The controls over outstanding debts
are ineffective and a finding is raised. Nkosinathi Kwena, a senior internal auditor gave Jane
review notes on her working paper (TRWP001) on 20 August 2021.

Definition Definition Methods and techniques used by the auditor to gather the appropriate evidence so that a true and fair judgment can be made on the quality of the financial statements of the client. Audit procedures are developed after determining audit objectives, scope, approach, and risk assessment.

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