StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Auditing - Assignment Example

Comments (1) Cite this document
Summary
The auditor will have to test the inventory based on samples and is required to determine the design, size and selection of samples from the population in which every item has an equal chance of selection (CAS301)
The period covered by auditor’s review of subsequent events…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER95.2% of users find it useful
Auditing Assignment
Read Text Preview

Extract of sample "Auditing"

Question CAS 89) The auditor shall perform alternative audit procedures to obtain sufficient appropriate audit evidence regarding the existence and condition of inventory
Inspection of documentation of the subsequent sale of specific inventory
Recalculation o the schedule of goods purchased and the and sold to confirm with the value of stock at hand
Inquiring directly from the suppliers on the nature, quantity and value of goods sold
Performing ratio analysis to determine the consistency or inconsistency in the inventory; such as inventory days
Question 2
The auditor will have to test the inventory based on samples and is required to determine the design, size and selection of samples from the population in which every item has an equal chance of selection (CAS301)
The sampling techniques available for the auditor include
Random selection through which inventory are selected random numbers simulator or generator
Systematic selection; whereby the inventories are divided by sample size to give sampling interval, which forms a basis of selection of subsequent units
Monetary unit sampling; through which the sampling units are selected on value weighted selection based on monetary amounts, and,
Haphazard selection auditor selects without following any systematic format.
Question 3
The auditor should consider the management’s estimation of uncertainty and adequacy of related disclosures (CAS 157).
The procedures include
Examining how management has considered alternative assumption or findings and the reasons they were to adopted
The auditor should considers the reasonableness of significant assumption adopted by management to write-off the cost of inventory
The auditor should consider the appropriateness of the financial reporting framework used to write-off the cost of inventory
The auditor should consider how management had accounted for the impairment in the financial statements by considering the recognition, measurement and disclosure principles
Question 4
External confirmation from the supplier that the sale of goods has occurred and pertains to the entity (Ex CAS211)
Recalculations of documents of inventory to ensure that transactions have been recorded
Inspecting documents used in the transaction to confirm that the amounts have been recorded appropriately
The auditor should inspect the goods purchased to verify existence
Inquiring from the sales department on the date in which the purchase of the goods took place to ascertain the correct accounting period
Question 5
The period covered by auditor’s review of subsequent events are the events between the date of the financial statements (date of last period covered by the financial reports) and the date of the auditor’s report (when they are made available to third parties) and facts after the auditor’s report (Ex CAS92).
The events that should be disclosed are the non- adjusting events that do not provide additional evidence of conditions that existed at the end financial reports.
Examples include
A fall in the market value of investments
Dividend declared to shareholders after the date of financial reports
The events that should be adjusted are the adjusting events; they give additional evidence of conditions that existed at the financial reporting date.
Examples include
Determination after the end of financial year of the cost of an asset purchased before end of reporting period
The amount of bonus payments where the company had a constructive obligation to make such payments
Outcome of a litigation process that confirms a contingent liability
Discovery of fraud or error in the financial statements
Question 6
Assume you learn of a subsequent event after the date of the audit report (end of audit fieldwork) but before the audit, report has been issued (Ex CAS 209).
The auditor has no obligation to perform any audit procedures
However, if it is an event that may have caused the auditor to amend his report, the auditor shall
Discuss the matter with management and those charged with governance
Determine whether financial statements should be amended
Inquire how management intends to address the matters
If management amends financial statements
Auditor should carry out procedures on the amendments
Provide a new report on the amended financial statements
If management does not amend the financial statements but the auditor believes that there is need to amend then
If audit report has not been provided, he should modify the opinion
If report has already been provided, notify management not to issue financial statements to third parties until necessary adjustments have been ,made
Question 7
It necessary to compare unadjusted misstatement to other bases of materiality because it enables the auditor to select audit procedures that can be expected to reduce audit risk to lower levels (Ex CAS 118)
What should the auditor do if the unadjusted misstatements exceed one or more materiality thresholds?
i. Increasing the assessed risk of material misstatement including extended additional test of controls
ii. Increasing the detection by modifying the nature, timing and extent of planned audit procedures
Works Cited
Moroney, Robyn, and Fiona Campbell. Auditing: A Practical Approach First Canadian Edition. John Wiley & Sons Canada, Limited, 2012. Print.
Reporting on Financial Statements in the BC Public Sector under Canadian Auditing Standards. Victoria, B.C.: Office of the Auditor General of British Columbia, 2012. Print. Read More
Tags
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Auditing Assignment Example | Topics and Well Written Essays - 500 words - 1”, n.d.)
Auditing Assignment Example | Topics and Well Written Essays - 500 words - 1. Retrieved from https://studentshare.org/finance-accounting/1669752-auditing-assignment
(Auditing Assignment Example | Topics and Well Written Essays - 500 Words - 1)
Auditing Assignment Example | Topics and Well Written Essays - 500 Words - 1. https://studentshare.org/finance-accounting/1669752-auditing-assignment.
“Auditing Assignment Example | Topics and Well Written Essays - 500 Words - 1”, n.d. https://studentshare.org/finance-accounting/1669752-auditing-assignment.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
om
omarihayes added comment 10 months ago
Student rated this paper as
This document saved me today. I liked the content. It was very useful for my finance & accounting course.

CHECK THESE SAMPLES OF Auditing Assignment

Auditing

... ………………………………………………………………………….xxxxxx …………………………………………………………………….xxxxxx …………………………………………………………………………xxxxx ………………………………………………………………………..xxxxx @2013 Introduction Auditors work is to verify documents, examine them and do tests of details. In the process, it is their duty to detect fraud or error. However, the auditor can fail to detect any errors or fraud due to Audit risk. Audit risk is the risk which occurs when an auditor expresses inappropriate audit opinion due to material misstatements (Kumar and Sharma 2006). This report will discuss several audit problems which can impact the materiality of financial statements. Wentworth Brewster limited specializes with the manufacture of sports equipment. All the products are sold to specialist...
6 Pages (1500 words) Assignment

Auditing Assignment

...REQUIRED (a) POTENTIAL AUDIT RISK AREAS IN ADIOS LTD'S FINANCIAL MENTS There are following areas in the Adios Ltd's financial ments, the auditor will and should come across during the inspection of the financial records put forth by the company's management: Decreased Intangible Assets The company's balance sheet indicates a sudden decrease in the company's intangible assets whereas no explanation or adjustment has been made in this regard by the company's management. Increased Total Assets Although the company has shown a considerable decline in its investment in intangible assets, but the balance sheet show an overall increase in total assets as compared to the previous year. This can be a potential material risk for an auditor...
4 Pages (1000 words) Assignment

International Auditing Standards

...Running Head: International Auditing Standards International Auditing Standards 400, 401 and 402 International Standards on Auditing (ISA) 400 Description of the ISA ISA 400, Risk Assessments and Internal Control, provides guidance in the understanding of the "accounting and internal control systems and on audit risk and its components: inherent risk, control risk and detection risk" (ISA 400, par. 4). The main purpose of this is not to assess the effectiveness of the internal control system but to understand those procedures and controls that may impact the "nature, timing and extent of substantive procedures" (ISA 400, par. 9). The ISA stated that the auditor needs to obtain an understanding of those accounting and internal control...
7 Pages (1750 words) Assignment

Auditing

... Auditing Tetonic As an auditor I will know that all the minutes have been made available to me by referring to those of previous meetings. This is because the minutes of each meeting entails what was discussed in the previous meeting and by going through the minutes, I will be in a position to check the dates, members in attendance, agenda helping me trace if all the minutes have been availed. As an auditor it will be my responsibility to inquire from the board and management to fully acknowledge to me that all documents containing the minutes have been availed to me and also my client should allow me to access all the documented minutes including the minutes the next minutes, for instance minutes for 2012 I will ask my client...
2 Pages (500 words) Assignment

Auditing

...Auditing Part A 054 words Part B: 778 words March 27, Introduction The audit process entails determining whether the Havelock Europa Plc financial reports are true or correct (Havelock Europa, 2013). Untrue and incorrect financial reports include erroneous financial statement amounts (Arens, 2011). Errors are unintentionally misstatements are due to human errors. On the other hand, fraudulent financial statements include figures that were intentionally inserted by one or more company employees, possibly conniving with the external auditors. The research delves on the five areas of heightened audit risk. Auditing must prioritize auditing financial accounts pegged as high inherent risks to lessen audit risks. Part A The research delves...
8 Pages (2000 words) Assignment

Auditing

...Auditing Affiliation Issues involved in client acceptance and renewal. Client acceptance and renewal is a decision that has to be made complying with the professional standards. By so doing, various issues are investigated to ensure credible client acceptance and renewal. Among the issues involved are professional standards that are quite a number. To start with, the firm should have the qualifications needed to undertake the engagement (Bierstaker, Brazel, Caster & Reed, 2010). The firm should be free of illegal acts and honest management of the reporting entity. The financial reporting scheme and internal control scheme of the client should give an on hand financial statement. The procedures involved in the investigation include, going...
4 Pages (1000 words) Assignment

Contemporary Auditing

...Case 5.3 the North Face, Inc. Q1: The auditors should not compel their client(s) to accept every proposed audit adjustments, including immaterial misstatements. For the reason, that the effect of immaterial misstatements will not affect the client’s decision based on the financial statement for the audited period. Remarkably, the auditors have an obligation to suggest to the client why they are recommending particular adjustments. In case study, the clients does not approve the adjustments for a specific logical reason, and the auditors have to respect the client’s decision, mainly because of the absence of material effect on the financial statements. Q2: Crawford auditors should take categorical measures not to permit the client...
1 Pages (250 words) Assignment

Auditing&Assurance

... anomalies and discrepancies, a proper and independent investigation must be initiated. Auditors are the only professional that can be able to launch a thorough investigation that can assist the management discover fraudulent transactions and other illegal activities2. Auditing entails a number of activities. It analyses the books of account of an organization critically. Groups carry out numerous transactions that are recorded in the books of account. Conversely, fraudulent activities may take place during the recording stage. Accountants may alter the figure so that they can embezzle funds. The role of auditors is to look into the books to ensure no suspicious transactions have been recorded. In addition, they confirm the arithmetic...
10 Pages (2500 words) Assignment

Auditing

...Auditing Task Introduction The preparation of financial ments is in compliance with the requirements of company law. Different bodies provide the guidelines for preparing the financial statements. The reason for the framework for the preparation of financial statements is the difference in laws prevailing in different countries. In a bid to ensure conformity and uniformity, bodies such as the International Financial and Reporting Standards prepared rules and regulations that should be followed when preparing the financial statements (Foster & Greenawalt 1995, pp. 1-5). Precisely, the primary purpose of the accounting framework is to ensure that the users of financial information are provided with user-friendly information. This assignment...
6 Pages (1500 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic Auditing Assignment for FREE!

Contact Us