Describe the quality control issues arising from each of the findings.
Zhetta CompanyA review of working papers found that some working papers had not been signed off by
the team member that had completed the work. Some working papers were not dated, and
some did not have a signature confirming they had not been reviewed.
Petra Company
A mandatory procedure included in the audit plan which required a written representation
letter to be obtained, had not been completed. A comment had been added by the audit
manager stating that there were no issues requiring a written representation from
management.
Jantra Company
An audit test over purchases required a sample of 60 invoices to be tested. 54 had been
tested and found to be recorded accurately and completely. Six (6) invoices could not be
found. No further invoices were identified for testing and a conclusion was drawn based
on the 54 items tested.
Mantra Company
The audit of a material provision was performed by the audit junior as the audit manager
was too busy finishing off work for the previous client on which they had been working.
Nuna Company
The planning section of the file has not been completed. The
were copied over from the previous year’s file and the same approach and sample sizes
have been used to conduct this year’s audit.
You are required to:
Describe the quality control issues arising from each of the findings.
The issues of internal control in each of the above situations are explained as follows:
Zhetta Company:
The review regarding the working paper revealed that working papers weren't signed off by all the team members and many of the working papers had no signatures and dates on them. This can be a high-quality control issue since the auditor should maintain these papers as evidence of the audit he has conducted.
Petra Company:
The audit manager’s stand stating that there have been no issues requiring a written representation from the management is not accurate. The audit team must obtain the written representation from the management since it's an element of the mandatory procedure of the audit process. During this situation, the audit team was not able to obtain the specified written representation from the management.
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