6:14 M F3 all 60%The audit partner has just advised you thathe has been approached to accept theappointment of auditor to Bungie Limited.Bungie Limited is a manufacturer of gamingmachines and has been named in a recentanti-corruption enquiry as having offeredincentives to state government members tosupport a proposed bill that would allow anincreased number of gaming machines inlicensed premises. No charges have yet beenlaid against Bungie Limited or any of itsemployees. The audit partner explains to youthatBungieLimited'sauditorswerere-appointed for the current financial year atthe Annual General Meeting held twomonths ago. However, Bungie Limited'smanaging director is unhappy with theexisting auditing firm as the audit partnerassigned to Bungie Limited haschanged.beenRequired:The audit partner is unsure whether heshould accept the appointment and hasasked you to outline any ethical, legal, andother factors to consider in his decisionabout whether to accept the appointmentfor the current year and indicate the stepsthat need to be taken prior to theappointment.ANSWER:

Auditing refers to the process of physically investigating and checking all the transactions…

Answered: The audit partner has just advised you…

The audit partner has just advised you that he has been approached to accept the appointment of auditor to Bungie Limited. Bungie Limited is a manufacturer of gaming machine and ha s boeo namod in ro

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter11: Current Liabilities And Payroll

Section: Chapter Questions

Problem 11.2CP

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DC 6-5 Obtaining a “Sufficient” Understanding of Internal Control. LO3, 4 The 12 partners of a regional public accounting firm met in special session to discuss audit engagement efficiency. Jones spoke up, saying: “We all certainly appreciate the firm-wide policies set up by Martin and Smith, especially in connection with the audits of the large companies that have come our way recently. Their experience with a large national firm has helped build up our practice. But I think the standard policy of conducting reviews and tests of internal control on all audits is raising our costs too much. We can’t charge our smaller clients fees for all the time the staff spend on this work. I would like to propose that we give engagement partners discretion to decide whether to do a lot of work on assessing control risk. I may be an old mossback, but I think I can finish a competent audit without it.” Discussion on the subject continued but ended when Martin said, with some emotion: “But we can’t…
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BER 2021 CONFIDENTIALEAB31103_Audit 2 Page 9 of 10Question 5Nurin, Aliah & Co has audited Kinokuyi Publishing Sdn Bhd (KPSB) for several years. Auditdocumentation, including internal control flowcharts as well as sales and cash receipts system,purchasing and payables system and payroll system notes, are accessible from the previousyear's file. You are the audit supervisor of Nurin, Aliah & Co, and you are evaluating thepaperwork documenting KPSB’s purchasing and payables system in preparation for theinterim and final audits for the fiscal year ending 31 December 2021. The company is a bookretailer with twelve locations across the Klang Valley and a central warehouse located in ShahAlam which holds the majority of the company's inventory. Below is an excerpt from theexisting systems notes:Store managers are in charge of placing book orders for their store. Store managers arecurrently unable to request books from any of the other eleven locations. Customers who wantto order books…
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Question 2Wirecard’s auditors are being faced with legal action after the collapse of the scandal-hitGerman payments firm. The German shareholders’ association SdK said it had filed criminal complaint against auditors at Ernst & Young (EY). The accountancy firm, EY refused to sign off Wirecard’s 2019 books after discovering1.9billion euros (US$2.1 billion) of cash had gone missing from its balance sheet. Munich-based Wirecard filed for insolvency, marking a tumultuous fall for the group. Wirecard, which is still listed on the DAX 30, has seen its share price capitulate since the accounting black hole was revealed. EY told CNBC that there were “clear indications that this was an elaborate and sophisticated fraud, involving multiple parties around the world in different institutions, with a deliberate aim of deception.” In an attempt to defend its reputation, the group added that “even the most robust and extended audit procedures” couldn’t uncover what it called a “collusive…