You are a manager at the accounting firm, Junita & Partners. You are reviewing the audit working papers of a client, GGL, whose financial year ended on 31 December 2020. GGL Bhd manufactures wire harnesses for cars and supplies them to car manufacturers. The current audit file, which includes all working papers, is given to you by your audit senior, who is charge of the audit work field. You have spent the last few days reviewing the working papers and noticed a few issues in relation to testing of trade receivables. GGL Bhd W/P ref: C-1 Accounts Receivable Prepared by: ZZ Reviewed by: SS 7/1/2021 14/1/2021 Date: 31-Dec-20 Date: UNAUDITED AUDITED AUDITED 2020 AJE/RJE 2020 2019 VARIANCE REF RM DR CR RM RM RM'000 NOTE Trade receivables 7,766,529 7,766,529 2,479,,843 5,287 213% less: Provision for doubtful debts (103,528) 7,766,529 2,376,315 104 100% 7,766,529 5,390 227% <10-1> Receivables turnover days Average trade receivables [ current year+ last year] 2020 2019 A 5,123,186 3,493,365 Sales <20-1> B 16,618,204 5,853,620 Days C=A/B X365 113 218 Anaytical Review: Trade Receivables have increased more than 100%, i.e 213% due to additional credits given to KKS Sdn Bhd amounting to RM6,693,357. While the trade receivables have increased during the year, the receivables turnover days have reduced from 218 days to 113 days. This shows that the company managed to collect the debts within 113 days. TB Agreed to Trial Balance as at 31 December 2020 PY Agreed to LYAWP Conclusion: From the work performed, management's assertions in relation to trade receivables have been validated. Required: (assume that the above document is the only audit documentation for trade receivables) (a) (i) Identify the related International Auditing Standards (ISAS) to be referred in performing audit of the above case. (ii) Describe the audit objectives of trade receivable
You are a manager at the accounting firm, Junita & Partners. You are reviewing the audit working papers of a client, GGL, whose financial year ended on 31 December 2020. GGL Bhd manufactures wire harnesses for cars and supplies them to car manufacturers. The current audit file, which includes all working papers, is given to you by your audit senior, who is charge of the audit work field. You have spent the last few days reviewing the working papers and noticed a few issues in relation to testing of trade receivables. GGL Bhd W/P ref: C-1 Accounts Receivable Prepared by: ZZ Reviewed by: SS 7/1/2021 14/1/2021 Date: 31-Dec-20 Date: UNAUDITED AUDITED AUDITED 2020 AJE/RJE 2020 2019 VARIANCE REF RM DR CR RM RM RM'000 NOTE Trade receivables 7,766,529 7,766,529 2,479,,843 5,287 213% less: Provision for doubtful debts (103,528) 7,766,529 2,376,315 104 100% 7,766,529 5,390 227% <10-1> Receivables turnover days Average trade receivables [ current year+ last year] 2020 2019 A 5,123,186 3,493,365 Sales <20-1> B 16,618,204 5,853,620 Days C=A/B X365 113 218 Anaytical Review: Trade Receivables have increased more than 100%, i.e 213% due to additional credits given to KKS Sdn Bhd amounting to RM6,693,357. While the trade receivables have increased during the year, the receivables turnover days have reduced from 218 days to 113 days. This shows that the company managed to collect the debts within 113 days. TB Agreed to Trial Balance as at 31 December 2020 PY Agreed to LYAWP Conclusion: From the work performed, management's assertions in relation to trade receivables have been validated. Required: (assume that the above document is the only audit documentation for trade receivables) (a) (i) Identify the related International Auditing Standards (ISAS) to be referred in performing audit of the above case. (ii) Describe the audit objectives of trade receivable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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![CASE 2 [TOPIC 5 - TOPIC 6]
You are a manager at the accounting firm, Junita & Partners. You are reviewing the
audit working papers of a client, GGL, whose financial year ended on 31 December
2020.
GGL Bhd manufactures wire harnesses for cars and supplies them to car manufacturers.
The current audit file, which includes all working papers, is given to you by your audit
senior, who is charge of the audit work field. You have spent the last few days reviewing
the working papers and noticed a few issues in relation to testing of trade receivables.
GGL Bhd
W/P ref:
C-1
Prepared by: ZZ
Reviewed by: SS
7/1/2021
14/1/2021
Accounts Receivable
Date:
31-Dec-20
Date:
UNAUDITED
AUDITED
AUDITED
2020
AJE/RJE
2020
2019
VARIANCE
REF
RM
DR
CR
RM
RM
RM'000
%
NOTE
Trade receivables
7,766,529
7,766,529 2,479,,843
5,287
213%
less:
Provision for
doubtful debts
104
(103,528)
7,766,529 2,376,315
100%
227%
7,766,529
5,390
<10-1>
Receivables turnover days
2020
2019
Average trade receivables [current year+ last year]
A
5,123,186 3,493,365
2
Sales
<20-1>
16,618,204 5,853,620
Days
C=A/B X365
113
218
Anaytical Review:
Trade Receivables have increased more than 100%, i.e 213% due to additional credits given to KKS Sdn Bhd amounting
to RM6,693,357. While the trade receivables have increased during the year, the receivables turnover days have reduced
from 218 days to 113 days. This shows that the company managed to collect the debts within 113 days.
TB
Agreed to Trial Balance as at 31 December 2020
PY
Agreed to LYAWP
Conclusion:
From the work performed, management's assertions in relation to trade receivables have been validated.
Required: (assume that the above document is the only audit documentation for
trade receivables)
(a) (i) Identify the related International Auditing Standards (ISAS) to be referred
in performing audit of the above case.
(ii) Describe the audit objectives of trade receivable](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F922356a2-f362-4e90-9195-2929eaa050f2%2F4b8e91a0-6cf6-485d-8905-c002a18e0b9e%2Fkzh8vnv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:CASE 2 [TOPIC 5 - TOPIC 6]
You are a manager at the accounting firm, Junita & Partners. You are reviewing the
audit working papers of a client, GGL, whose financial year ended on 31 December
2020.
GGL Bhd manufactures wire harnesses for cars and supplies them to car manufacturers.
The current audit file, which includes all working papers, is given to you by your audit
senior, who is charge of the audit work field. You have spent the last few days reviewing
the working papers and noticed a few issues in relation to testing of trade receivables.
GGL Bhd
W/P ref:
C-1
Prepared by: ZZ
Reviewed by: SS
7/1/2021
14/1/2021
Accounts Receivable
Date:
31-Dec-20
Date:
UNAUDITED
AUDITED
AUDITED
2020
AJE/RJE
2020
2019
VARIANCE
REF
RM
DR
CR
RM
RM
RM'000
%
NOTE
Trade receivables
7,766,529
7,766,529 2,479,,843
5,287
213%
less:
Provision for
doubtful debts
104
(103,528)
7,766,529 2,376,315
100%
227%
7,766,529
5,390
<10-1>
Receivables turnover days
2020
2019
Average trade receivables [current year+ last year]
A
5,123,186 3,493,365
2
Sales
<20-1>
16,618,204 5,853,620
Days
C=A/B X365
113
218
Anaytical Review:
Trade Receivables have increased more than 100%, i.e 213% due to additional credits given to KKS Sdn Bhd amounting
to RM6,693,357. While the trade receivables have increased during the year, the receivables turnover days have reduced
from 218 days to 113 days. This shows that the company managed to collect the debts within 113 days.
TB
Agreed to Trial Balance as at 31 December 2020
PY
Agreed to LYAWP
Conclusion:
From the work performed, management's assertions in relation to trade receivables have been validated.
Required: (assume that the above document is the only audit documentation for
trade receivables)
(a) (i) Identify the related International Auditing Standards (ISAS) to be referred
in performing audit of the above case.
(ii) Describe the audit objectives of trade receivable
Transcribed Image Text:(b) By referring to the above case:
(i) Discuss the audit procedures that been performed together with audit
evidence obtained.
(ii) Discuss the audit procedures supposedly to be performed together with
audit evidence will obtain.
(iii) Perform other the audit ticks and audit working papers that are
necessarily needed.
(c) (i) Review the base conclusion reached on the above case.
(ii) Exhibit any supporting document to complete the above working papers.
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