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
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(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
As for private equity asset allocation the Investment Office focused on finding external "value-added investors" with the sterling capability to build better businesses not only financially but mainly operationally. They believed this strategy led to enhancing returns independently of the market downturns. Thus, a limited number of long-standing partnerships were created - exclusively with partners aligned with the generalized investment policies of the Investment Office - with "over 90% of the portfolio invested in
Compare the primary auditor objectives in auditing historical financial statements to auditing internal controls over financial reporting. Identify at least two (2) objectives that are the most significant in reducing the risk of reporting errors or misstatements in financial statements. Provide a rationale for your response.
The purpose of this memo is to document the planning of the financial statement audit
Next are the Options proceedings. This proceeding relates more to the transactions made by the directors for their own benefits as well for the ones associated to them. The specific parties in this proceedings are; Environinvest Ltd, James Patrick Downey the liquidator of the company, and S.T.Y. (Afforestation) Pty Ltd as the plaintiffs. Roger Neil Pescott, Caroline Pescott, Euan Pescott, Blackburne Pty Ltd, Brabourne Pty Ltd, Mt Ross Pastoral Pty Ltd, Eurambeen Pty Ltd, Maridale (Victoria) Pty Ltd, Carnac Pty Ltd, Clive Randal Dossetor and Grant Anthony Robertson as the list of defendants.
Putnam and Jacobs LLP, to perform a financial statement audit for the year ended December 31,
a. Describe the purpose of analytical procedures performed in the planning stage of the audit.
Dq1 What are the steps that are required for an auditor to finalize the audit? Which steps are the most crucial to the outcome of the audit? How will these steps affect the final audit decision?
Assuming that the end result is an unqualified audit report, outline the primary responsibilities of the audit firm after it issues the report in question.
Let’s start with a review of the three requirements of Part A of the Course Project. Explain why it is important to analyze each financial transaction of a business and to report it in the Accounting Information
An important decision for any shareholder is deciding whether or not to do business with that company. When a business is audited, the operations are reviewed to make sure that nothing is being hidden. An auditor will review the company’s financial statement and practices to confirm that each are direct and correct. The financial statements are the business’s way of representing them and showing that they are following the Generally Accepted Accounting Principles. The audit process is an important one because it provides a platform for the auditor’s opinion concerning the financial statements of the company. As part of the audit process the auditor will conduct an audit plan that outlines a number of actions that he or she will be perform while also detailing the reason for those actions. With every audit, the business’s management is in charge of handing over the financial statements that the auditor will review; while the auditor will review the statements for any material or immaterial misstatements.
I am Ryan Kraft, a private business investor who is looking for a partnership within the
B) I think the auditors should have equal responsibility for detecting material misstatements due to error and fraud. It’s their job to make sure the financial statements are as accurate as possible. Although it may be hard to check all the information from a company it’s the responsibility of the auditor to sign off that everything is in check.
The auditor must obtain an understanding of the entity and its environment, including internal controls, so that they can identify and assess the risks of material misstatement on financial statements due to fraud or error and design and perform further audit procedures.
If I were to consult with the HTE board of director soon after Harold started making changes,
This article initiates with the introduction on what is audit planning. It basically addresses the audit plan strategy of K & S Corporation limited’s Financial Statements. Being an external auditor of the company, key factors to be considered in auditing the financials of the subject company have been discussed in the article. The most significant accounts at risk being materially misstated have been critically examined citing the possible risks associated with such accounts. Last but not the least, the article concludes with recommendations with respect to audit assessment plan of the company. Hence, this article seeks to act as a ready reckoner guide for an audit manager in audit planning of K & S Corporation Limited.