All Five Questions Are Compulsory and Must Be Attempted

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Audit and Assurance (International) Thursday 14 June 2012 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FIVE questions are compulsory and MUST be attempted. Do NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. This question paper must not be removed from the examination hall. The Association of Chartered Certified Accountants Paper F8 (INT) Fundamentals Level – Skills Module ALL FIVE questions are compulsory and MUST be attempted 1 Pear International Co (Pear) is a manufacturer of electrical equipment. It has factories across the country and its…show more content…
(4 marks) (30 marks) 3 [P.T.O. 2 (a) ISA 300 Planning an Audit of Financial Statements provides guidance to assist auditors in planning an audit. Required: Explain the benefits of audit planning. (4 marks) (b) ISA 530 Audit Sampling provides guidance on methods for selecting a sample of items for testing. Required: Identify and explain THREE methods of selecting a sample. (c) Describe the three types of modified audit opinions. (3 marks) (3 marks) (10 marks) 3 (a) Explain the external auditors’ responsibilities in relation to the prevention and detection of fraud and error. (4 marks) You are the audit manager of Currant & Co and you are planning the audit of Orange Financials Co (Orange), who specialise in the provision of loans and financial advice to individuals and companies. Currant & Co has audited Orange for many years. The directors are planning to list Orange on a stock exchange within the next few months and have asked if the engagement partner can attend the meetings with potential investors. In addition, as the finance director of Orange is likely to be quite busy with the listing, he has asked if Currant & Co can produce the financial statements for the current year. During the year, the assistant finance director of Orange left and joined Currant & Co as a partner. It has been suggested that due to his familiarity with Orange, he should be appointed
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