tate the appropriate audit opinion that the auditor would require. The Auditors of ROME, a high-profile bank, were unable to obtain sufficient and appropriate audit evidence concerning the carrying amount of ROME’s investment in ITA Pty Ltd as at 30 June 20X8. ITA Pty Ltd is a small firm of five financial planners in total. The auditors were denied access to the financial information of ITA, and they were not allowed to interview ITA’s Management. Consequently, the auditors were unable to determine the correct valuation of ITA Pty Ltd.
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State the appropriate audit opinion that the auditor would require.
The Auditors of ROME, a high-profile bank, were unable to obtain sufficient and appropriate audit evidence concerning the carrying amount of ROME’s investment in ITA Pty Ltd as at 30 June 20X8. ITA Pty Ltd is a small firm of five financial planners in total. The auditors were denied access to the financial information of ITA, and they were not allowed to interview ITA’s Management. Consequently, the auditors were unable to determine the correct valuation of ITA Pty Ltd.
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- You are an assurance services senior at Bailey & Associates and have noted the following independent issues in relation to the audit of Sleek Ltd: The accounting system at Sleek Ltd did not operate effectively during the first year of operations. Consequently, some general ledger accounts had to be based on estimates, as the actual data relating to these balances had been lost. (i) (ii) As a result of cost constraints, the directors of Sleek Ltd did not implement effective internal controls for debt collection. The debtors' tunover is 3.2 times. (iii) Due to increased competitive pressures, Sleek Ltd has recently moved the manufacture of some of its clothing lines out of Melbourne into regional areas. While Sleek Ltd saves around 20% in costs, the manufacturing process takes longer and on several occasions late delivery has resulted in lost sales. Required: Explain the impact of each of these separate issues on your assessment of audit risk, the materiality level and the audit strategy…Golden bank recently appointed the accounting firm Sanford,Son and Golrich as the banks auditors. The Bank quickly became one of Sanford,Son and Golrich’s largest clients. Subject to Reserve bank regulations,Golden Bank must provide for any expected losses on Accounts Receivable that the bank might not collect in full. During the course of the audit ,Sanford,Son and Golrich determined that the collectability of three large accounts of Golden bank seemed questionable. The auditors discussed this with Debbie Lee, the Financial controller . She assured the auditors that the loans were good and the debtors will be able to pay them in full once the economy recovers. Due to the effect of the covid 19 pandemic on the economy ,what the controller says is unlikely. Therefore Sanford,Son and Golrich must record a loss for the portion of the Accounts Receivable that might not be collectible.The controller objected and threatened to dismiss the auditors if they keep on insisting that the bank…You are an assurance services senior at Bailey & Associates and have noted the following independent issues in relation to the audit of Sleek Ltd: (i) The accounting system at Sleek Ltd did not operate effectively during the first year of operations. Consequently, some general ledger accounts had to be based on estimates, as the actual data relating to these balances had been lost. (ii) As a result of cost constraints, the directors of Sleek Ltd did not implement effective internal controls for debt collection. The debtors’ turnover is 3.2 times. Required: Explain the impact of each of these separate issues on your assessment of audit risk, and the audit strategy that would be adopted.
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- Which of the following statements is/are correct? O a. The ban on simultaneously offering consulting and auditing services to economically relevant companies within the framework of the FISG results from the bad experiences that BaFin had with corresponding offers in the context of the Wirecard scandal. O b. Violations of the so-called "blacklist" lead to significant fines being paid by the auditing company. Oc. According to the Financial Market Integrity Strengthening Act, companies are obliged to set up an audit committee to monitor the quality of the audit. O d. The external rotation of auditing firms requires more frequent tendering processes for auditing services.You are testing the controls over bank accounts for your audit client, Orleans Ltd. You note that the responsibility for bank reconciliations has changed due to a corporate reorganisation halfway through the current financial year. Both the staff member performing the bank reconciliations and the supervisor have changed. You are able to talk to only the current staff member and supervisor because the other staff took voluntary redundancies and left the client’s employment six months ago. Required: (a) What techniques are available to you to gather evidence about the bank reconciliations? Explain how you would use each technique and comment on the quality of the evidence obtained from each . (b) When you ask the employees responsible for bank reconciliations about how they perform the reconciliations there is a possibility that they will not tell the whole truth about their performance of the reconciliations. Given this, will you bother to ask them? Explain (c) Explain the impact of…An audit manager has led the audit of Topaz Ltd for the last three years. Evidence of a fraud involving the falsification of timesheets and supplier invoices to a significant value have been found. Senior management within Topaz are implicated. Discuss the extent to which the external auditor should be criticised for not discovering this fraud.