(a) Explain what you should consider and do before accepting the audit engagement from Hope-well Limited. (b) Identify and explain SIX audit risks that exist in the audit of Hope-well Limited? (c) Explain why it is not possible to eliminate audit risk completely.
Q: The tem
A: Audit engagement basically refers to the engagement of audit services that audit and audit’s clients…
Q: . Why do you need to make pre - engagement activities before making an actual audit?
A: At the beginning of audit engagement the auditor should undertake the following activities - 1)…
Q: 2. In the element of audit findings, this refers to what the auditor discovered as a result of…
A: AN AUDIT FINDINGS CONSISTS OF AUDIT RESULTS AND CONCLUSIONS BASED ON APPROPRIATE ANALYSIS AND…
Q: Describe how the "culmination" of the audit process looks like. 2. In the final stage of a…
A: Describe how the "culmination" of the audit process looks like. The culmination of the audit…
Q: Auditors need to identify audit risk in planning an audit engagement. In doing so, the audit risk…
A: Answer (a) – Audit Risk – Audit risk is a risk that the auditor may give inappropriate opinion when…
Q: How will you explain the Auditing Process to someone with experience in Auditing?
A: Auditing: An audit looks at your company's financial records to make sure they're correct. This is…
Q: Why are audit objectives important in planning and performing an audit? Is it possible for audit…
A: Why are audit objectives important in planning and performing an audit? Audit objectives are the…
Q: Which of the following is appropriate about risk assessment? A. The assessed level of inherent and…
A: Risks are the unfavourable situations or circumstances that can make loss for the organisation or…
Q: For the company, United Therapeutics, which specific accounts should the auditors identify for…
A: United therapeutics is biological company and is listed on NASDAQ stock exchange. It designs and…
Q: Describe the purpose of an audit. How can the audit experience be viewed as positive?
A: The study and verification of a company's financial data is described by as audit in accounting. An…
Q: You have been presented with the following draft financial information about Efren Bata Reyes Ltd, a…
A: Audit risk is composed of two parts: material misstatement risk and detection risk. The risk of…
Q: Which of the following is not a benefit claimed for the practice of determining materiality inthe…
A: The audit is an independent review of an entity's business records. The objective of audit is the…
Q: Auditors must collect sufficient and appropriate audit evidence to reduce audit risk. This audit…
A: Auditors must collect sufficient and appropriate audit evidence to reduce audit risk. This audit…
Q: You are required to read the following statement carefully, and then, discuss the factors behind the…
A: The auditor needs to obtain a reasonable assurance that the financial statement is free from…
Q: After engaging Lakeside, your firm begins an analytic review. 1. Why do we begin an audit with an…
A: The audit firm would be responsible for conducting the audit engagement and performing the necessary…
Q: Explain what is meant by lapping and discuss how the auditorcan uncover it. Under what circumstances…
A:
Q: Explain
A: Audit is the process of examining and analyzing the financial documents relating to the company’s…
Q: When would an auditor prefer to conduct a black-box audit? What about a white-box audit?
A: A black box audit is a type of security audit in which the auditor examines a system or application…
Q: Speculate on which type of risk creates the most uncertainty for the auditor and recommend at least…
A: An audit occurs when a professional analyses or inspects multiple books of accounts, followed by a…
Q: Consider the concepts of sufficient and appropriate audit evidence. Assess how audit risk relates to…
A: It is responsibility of an auditor to express his opinion on Reliability of financial statements. An…
Q: Why is professional skepticism important when completing an audit? Please explain.
A: The objective of this question is to understand the importance of professional skepticism in the…
Q: In auditing receivables, what are the audit objectives and how would you be performed to arrive at…
A: Auditing implies an exhaustive and formal review of your records. Auditors give extraordinary…
Q: Explain how analytical procedures are useful in: (1) The risk assessment stage of the audit. (2) The…
A: As per standards on auditing (SA) 520 “Analytical Procedures“, The term “analytical procedures” mean…
Q: Critically evaluate how the breach of ethics by auditors could contribute to expand the audit…
A: The objective of this question is to critically evaluate the impact of auditors' ethical breaches on…
Q: audit function: a) Risk assessment provides a framework for allocating limited resources to achieve…
A: Risk: It refers to the price paid for earning maximum returns. In business risk there is probability…
Q: 1. List three reasons management may ask for an operational audit to be performed and explain how…
A: Answer 1) Operational audit includes a review of an activity executed in entity. a) find any…
Q: What are the objectives of an audit risk assessment? Explain why a risk assessment performed during…
A: Audit risk assessment is such a procedure which are all performed for the purpose of understanding…
Q: The audit risk model includes the four risks listed below. Match the type of risk with the related…
A: Audit risk is the risk that financial statements are material misstatement and audit opinion states…
Q: The audit plan is more detailed than the overall audit strategy in that it includes the nature,…
A: Auditing means the independent checking of company operation by outsider. Auditor is a qualified and…
Q: Explain the main areas of focus in the general accepted auditing standards. Explain four actions…
A: Explain the main areas of focus in the general accepted auditing standards. 1. Planning and…
Q: Which of the following is not a function or benefit of a checklist? Providing evidence of audit…
A: In auditing, a checklist refers to a structured and systematic tool used by auditors to ensure that…
Q: Critically evaluate the reality of auditor indpendence and the arguments for and against the role of…
A: Auditing refers to a process of evaluating the fairness and correctness of financial accounts by the…
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- You are the audit senior responsible for the audit of Sampson Limited. You are currently planning the audit for the year ended 31 December 2019. During your initial planning meeting held with the financial controller, he told you of the following changes in the company’s operations. (i) Due to the financial controller’s workload, the company has employed atreasurer. The financial controller is excited about the appointment because in the two months that the treasurer has been with the company he has realized a small profit for the company through foreign-exchange transactions in dollars. (ii) Sampson has planned to close an inefficient factory in the northern partof the country before the end of 2019. It is expected that the redeploymentand disposal of the factory’s assets will not be completed until the end ofthe following year. However, the financial controller is confident that hewill be able to determine reasonably accurate closure provisions. (iii) To help achieve the budgeted…You are now nearing the completion of the audit of Rooney Co Ltd for the year ended 31 December 2020. Draft financial statements have been produced. You have been given the responsibility of performing of a review of the audit files before they are passed to audit manager and the audit partner for their review. You have been asked to concentrate on the sources of the evidence obtained. While reviewing the working papers you noted that your junior officers have recorded the following sources of evidence:(i) Oral representation by management in respect of the completeness of sales where the majority of transactions are conducted on a cash basis.(ii) Year-end suppliers' statements (iii) Physical inspection of a non-current asset by an auditor One of your responsibilities is to act as a mentor to junior officers into the department Required : ISA 500 Paragraph 4 states that ‘’The objective of the auditor is to design and perform audit procedures in such a way as to enable the auditor to…You are the audit senior on the audit of PXT Ltd for the yearended 31 January 2020. A former member of the auditengagement team for PXT Ltd left your firm two years ago totake up employment with this client.Identify and explain the potential threats to your firm’sobjectivity and independence when auditing PXT Ltd and listtwo factors you would consider when assessing thesignificance of these threats
- You are a new staff member of Monet & Associates, a mid-sized accounting firm and have been assigned to an engagement team that is conducting the financial report audit for Harrisons Ltd (Harrisons). The engagement team, under the guidance of the engagement partner, Vince Mater, is currently performing a preliminary risk assessment of the audit client. The following documents have been provided to you: Memo from audit partner, Vince Mater, dated 6th January 2020 which includes a summary of the initial audit procedures undertaken by the engagement partner for the 31 December 2019 audit. A relevant industry outlook report provided by the Australian Construction Industry Forum published on 7 November 2019. REQUIRED: You have been asked to assess the inherent risk of the client and perform preliminary analytical procedures as part of the audit planning process in obtaining an understanding about the client’s business and indicate where there is an increased likelihood of…You are the audit manager of Matfine & Co and are reviewing the key issues identified in the files of two audit clients as follows: Pito Industries Co (Pito) Pito’s year-end was 31 March 2019 and the draft financial statements show revenue of $32·2 million, receivables of $6·1 million and profit before tax of $3.4 million. The fieldwork stage for this audit has been completed. A customer of Pito owed an amount of $375,000 at the year-end. Testing of receivables in April highlighted that no amounts had been paid to Pito from this customer as they were disputing the quality of certain goods received from Pito. The finance director is confident the issue will be resolved and no allowance for receivables was made with regards to this balance. Albo Trading Co (Albo) Albo is a new client of Matfine & Co, its year-end was 31 January 2019 and the firm was only appointed auditors in February 2019, as the previous auditors were suddenly unable to undertake the audit. The fieldwork…You are an audit senior of Aidit & Co and are in the process of preparing the audit programmes for the final audit of CariClean Ltd. for the year ending 31 December 2019. The company develops and manufactures specialist cleaning products and has been a client of your firm for several years. The audit manager has attended a planning meeting with the finance director and has provided you with the following notes of the meeting: Aidit & Co calculates a large number of ratios and trends for comparison with industry averages and prior year calculations. For most engagements, the client’s business was significantly different from the industry data and the client would automatically explain away any discrepancies by attributing them to the unique nature of its operations. Aidit is concerned about the usefulness of ratio and trend analysis. However, the analysis is done at the completion of every audit and Aidit believes the calculations provide him with an overview of the client’s…
- You are the audit senior with HLAM Chartered Accountants. Your audit manager Michael Lim has just assigned you to the audit of Fiabci Malaysia Limited (Fiabci) for the year ended 31 December 2020. The reason behind your assignment to Fiabci Limited’s audit was that you had recently been seconded for nine months to work with Fiabci’s financial reporting department. Your client is a property developer. Michael feels that your knowledge of Fiabci’s business will aid in increasing the efficiency of the current year’s audit. Fiabci has a reasonably steady growth in 2020, with sales holding up despite increasing competition from other property developers. Required (a) Identify and explain the significant threats to potential ethical problems in the audit of Fiabci Limited. (b) Suggest any relevant and practical safeguards you feel may be appropriate for the issues identified.You are the audit senior responsible for the audit of Sampson Limited. You are currently planning the audit for the year ended 31 December 2019. During your initial planning meeting held with the financial controller, he told you of the following changes in the company’s operations. Due to the financial controller’s workload, the company has employed a treasurer. The financial controller is excited about the appointment because in the two months that the treasurer has been with the company, he has realized a small profit for the company through foreign-exchange transactions in dollars. explain how the components of audit risk (inherent, control or detection risk) are affected.During your review of the audit field work completed by a new junior employee of the audit firm, John Smith, you have noted many areas which require additional review notes. John, who has just completed the interim audit of Taxon Ltd for the year ended 30 June 2019, has just performed testing of controls. When testing controls over payments made to related parties, there should be evidence of approval and sign-off by the chief financial officer (CFO). John selected a sample of payments made to related parties and vouched them back to the electronic funds transfer (EFT) forms to sight the CFO’s signature of approval. Based on a sample of ten payments, six had been approved by the CFO in writing. However, the remaining four EFT forms (for immaterial amounts) did not have the CFO’s signature, but John noted that the CFO had given verbal approval. John concluded that because all internal controls were working, the audit team could use analytical procedures alone to audit payments made to…
- It is 1 July 20X5. You are an audit manager in Welford & Co, a firm of Chartered Certified Accountants. Your role includes performing post-issuance audit quality reviews, and you have been asked to review the audit work performed on Rivers Co for the financial year ended 31 January 20X5. You have gathered the following information from your review of the audit file: Audit team and feesRivers Co is a listed company operating in the construction industry. The company complies with corporate governance regulations and has an audit committee. Rivers Co has been an audit client of Welford & Co for eight years, and Bob Newbold has been the audit engagement partner during this time. Rivers Co’s auditor’s report was signed by Bob Newbold and issued last week. The report contained an unmodified opinion. Welford & Co requires its staff to record each hour they spend working on each client in the firm’s time management system. From reviewing the time records relating to the audit of…AJ Kumar is completing the December 31, 2020, audit of Kiwi Company. As part of the final procedures, Kumar has requested representations from Kiwi’s management regarding their assertion as to the fairness of the financial statements and other important matters addressed by professional standards. Because Kiwi’s management is attending an analyst briefing in the upcoming week, Kumar receives these signed representations dated February 6, 2021. Kumar has a few remaining items to complete, does so, and dates the auditor’s report February 9, 2021. Describe the most appropriate course of action that the auditors should take.Dunlop Limited and Advertising Company has been audited by Acorn Auditing Services for a number of years. The audit team of Acorn Auditing Services visited Dunlop in March, to review the Company’s internal control system in preparation for the final audit of the company’s financial statements for the year ending 31 July 2021. As part of the final audit team, you, together with other team members, have been instructed to attend a briefing meeting as part of the planning of the final audit of Dunlop Ltd year-end financial statements. REQUIRED: (a) In preparation for the final audit of Dunlop Ltd financial statements for the year ending 31 July 2021, explain the details the auditors need to carry out. (b) In the planning process for the final audit of the financial statements, state five (5) matters that should be discussed at the audit brief meeting.