why is the company unable to obtain sufficient assurance?
Q: what is Segregation of Duties in accounting and how it can prevent fraud?
A: Segregation of duties: In a firm, segregation of duties (SOD) is a fundamental building element of…
Q: Information is immaterial if omitting it or misstating it could influence decisions that users make…
A: Materiality is determined by considering both quantitative and qualitative factors.
Q: oo high, o
A: Since auditors can and often do not seek to review all activities, audit risk is essential to the…
Q: Difference between business risk and audit risk?
A: Risk is the chances that actual will differ from expected results.
Q: Why do auditors use a business risk approach ?
A: The factors that prevent or hinder the organization to achieve its goal or objectives, are termed as…
Q: The risk that a client's financial statements are susceptible to material misstatements is a.…
A: SOLUTION- INHERENT RISK IS THE RISK POSED BY AN ERROR OR OMISSION IN A FINANCIAL STATEMENT DUE TO A…
Q: What are disadvantages of external private audit?
A: External Audit refers to independent examination of financial statements of the organisations. These…
Q: Which of the following is NOT one of the purposes of internal control? a. to guarantee the success…
A: Internal control involves procedures and policies to ensure the integrity of the accounting…
Q: A company cannot choose whether a mandatory information should be provided in the administration…
A: It is compulsory to provide the mandatory information in the administration reports or in the notes…
Q: _______________________________is a possible safeguard implemented by the client that might mitigate…
A: Answer: Concept: Audit Independence threat is the threat that are experienced by auditor during the…
Q: What is meant by the nature of the company, and why is it important to inherent risk assessment?
A:
Q: Define auditing. How is auditing different from accounting?
A: Accounting: Accounting is a system, or a process of collecting and organizing economic…
Q: Whare are the disadvantages of internal goverment audits
A: Given: The disadvantages of the internal public audit.
Q: Whether the act of overstating in revenue is considered and classified to be a significant risk.…
A: Revenue: Revenue is income earned by a firm selling its goods and services to other parties. The…
Q: Whare are the disadvantages of external goverment audits?
A: Government Audits generally refer to audit of performance of the Government activities with respect…
Q: ______________________is a possible safeguard implemented by the client that might mitigate an audit…
A: Audit: It is the examination of each and every financial transaction. so that auditor can make their…
Q: What practical difficulties are encountered by a trader due to incompleteness of accounting records?
A: Some practical difficulties are encountered by a trader due to incompleteness of accounting records…
Q: . Generally, audit evidence cannot be obtained entirely through substantive procedures True or…
A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…
Q: How do the NOCLAR standards change the traditional practice of maintaining confidentiality of audit…
A: Auditing is defined as onsite validation activities such as: Inspection or investigation of…
Q: What are disadvantages of internal public audit?
A: Internal public audit refers to evaluation of a company's internal controls and accounting process…
Q: What is serious regulatory lapses in the system as difficulties in the financial system?
A: Financial system is the system where all the players are involved and exchange funds & money…
Q: How CSR related to accounting fraud?
A: CSR or Corporate Social Responsibility refers to the practices and policies implemented by corporate…
Q: In the Framework, it is possible that an entity may not disclose relevant information. Why?
A: The <IR> Framework is the International Integrated Reporting Framework, which presides over…
Q: Explain why the failure of financialstatement users to differentiateamong business failure,…
A:
Q: How does audit risk relate to audit evidence?
A: Audit Evidence The information obtained by the auditor from numerous sources (finance records,…
Q: How can patents, copyrights, and legal challenges be used to manage business risk?
A: A company can adopt a risk management strategy to mitigate business risk.
Q: Why should receiving reports be prenumbered? What assertion would an auditor test using thereceiving…
A:
Q: Why should auditors act as though there is always a potential conflict of interest between the…
A: Holding is a belief that any sort of potential conflict of interest exists between the auditor and…
Q: prudent person concept
A: Prudent person concept is a widely used term in accounting and auditing. It suggests that the person…
Q: Which of the following factors are not relevant to the judgement involved in management's assessment…
A: A going concern is an accounting concept that refers to a corporation that is financially sound…
Q: How can we reduce this risk in financial reporting process? "Are redundant and out-of-date…
A: Financial reporting is a typical accounting approach that uses financial statements to convey a…
Q: How does criminology differ from the study of accounting or auditing?
A: Criminology is a detailed scientific study of various tools that analyzes the root cause i.e. the…
Q: Why is the audit of revenue recognition riskier for a new company
A: According to the GAAP, the companies should not claim any revenue until they have provided the…
Q: What is business risk? and How does it affect audit risk?
A: Business Risk: Business risks are elements which have an adverse effect on the performance and…
Q: Where would an auditor find the proper authorization that indicates it is okay to pay a vendor?
A: Auditor: Auditors are defined as officials appointed by an organization to monitor and analyze the…
Q: What is the major difference between auditing services and assurance services?
A: Audit and assurance both are the process used to analyse and evaluate the financial records of the…
Q: Discuss the objective of eliminating the receiving function.What accounting/audit problems need to…
A: Auditing is the process of ensuring that an entity's financial records are correct and fairly…
Q: What is the problem with an auditor overrelying on management’s representations on the financial…
A: Solution: Introduction: An auditor is a person or firm of auditor(s) who is a qualified and…
Q: Which of the following is correct about audit opinion? a. It does not assure the future viability of…
A: Correct option is A It does not assure the future viability of the entity Explanation The auditor's…
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- Pacman Ltd commenced business in 2015. For the year-ending 31/12/2016, they incur a loss of $2.2 million. It is not anticipated that there will be further losses as the company becomes more established in the market and will generate taxable profit in subsequent years. Profits before tax for subsequent years are: 2017: $560,000 2018: $890,000 2019: $970, 000 There are no temporary differences between carrying value of assets or liabilities. Tax rate is 30%. Prepare journal entries for 2017, 2018 and 2019During the year ended 30 June 2014, Parent company guarantees borrowings of Subsidiary company which amounts to $1,000,000. At the time of the guarantee, Subsidiary’s’ financial position was sound. During the year ended 30 June 2015, the financial condition of Subsidiary company deteriorates and at 30 June 2015 Subsidiary company files for protection from its creditors. Requirements: 1) How should this be treated in Parent’s financial statements for the year ended i) 30 June 2014 ii) 30 June 2015.You have been asked to carry out an investigating by the management of Adepa Ltd. One of the company’s subsidiaries, Papa Engineering Ltd, has been making losses for the past years. Adepa’s management is concerned about the accuracy of Papa Engineering’s most recent quarter’s management accounts. The summarized income statements for the last three quarters are as follows: Quarter to 30/09/17 30/06/17 31/03/17 GHS000 GHS000 GHS000 Revenue 860 668 686 Opening inventory 360 326 331 Materials 636 468 475 Direct wages…
- Part A In an article published in The Australian on 4 May 2021, it was noted that the company named as the ‘ABC Group’ reported a big loss equal to $595 million and negative net assets of $75 million. The company seems insolvent and unable to pay all of its liabilities if they fall due. The auditors did not qualify the financial statements, nor challenge the directors on their assertion that the company was a going concern. Requirement: Discuss the implications for the company’s financial statements preparation and presentation if the company is not considered to be a going concern? Use the conceptual framework concept and general-purpose financial statements requirement given the evidence provided above?a) Omantel company showed an increase in earnings per Share (EPS) in 2019. However, the company forgot to disclose this information in its annual report. b) In 2019, Zain Oil company was being sued for damages the seaside because its chemical material dropped to the sea. The settlement of which could threaten the financial stability of the company. The company decided to choose non-disclosure with the hope that its lawyer may win the case at court. which kind of qualitative characteristics of useful financial information in this case?In an article published in The Australian on 4 May 2021, it was noted that the company named as the ‘ABCGroup’ reported a big loss equal to $595 million and negative net assets of $75 million. The company seemsinsolvent and unable to pay all of its liabilities if they fall due. The auditors did not qualify the financialstatements, nor challenge the directors on their assertion that the company was a going concern.Requirement:1) Discuss the implications for the company’s financial statements preparation and presentation if thecompany is not considered to be a going concern? Use the conceptual framework concept andgeneral-purpose financial statements requirement given the evidence provided above?
- Da-Rocha Ltd is a listed manufacturing company which prepares its financial statements for the year ended 31 October, 2018 in accordance with IFRS. The financial statements are due to be authorized for issue on 15 January 2019. i.Da-Rocha Ltd holds an investment in the shares of a listed company, Shelga Ltd. During November 2018 there was a material fall in the value of Shelga Ltd’s shares. Analysts attribute the fall in value principally to a fraud dating back to December 2017 that was discovered by Shelga Ltd's management and announced publicly in November 2018. ii.In December 2018, the directors of Da-Rocha Ltd publicly announced a plan to reduce the workforce by 10% as a result of worsening economic conditions. Required: Discuss the effects of each of the above items on the financial statements of Da-Rocha Ltd for the year ended 31 October 2018 in accordance with IAS 10 Events after the Reporting PeriodSumpak, Inc. owns 35% of Marin Corporation. During the calendar year 2004, Marin had net earnings of ₱300,000 and paid dividends of ₱30,000. Dane mistakenly recorded these transactions using the fair value method rather than the equity method of accounting. Dane recognized ₱20,000 gain on the change in fair value of the investment during the year. What effect would this have on the investment account, net income, and retained earnings, respectively?a. Understate, overstate, overstateb. Overstate, understate, understatec. Overstate, overstate, overstated. Understate, understate, understateA. Da-Rocha Ltd is a listed manufacturing company which prepares its financial statements for the year ended 31 October, 2018 in accordance with IFRS. The financial statements are due to be authorized for issue on 15 January 2019. i.Da-Rocha Ltd holds an investment in the shares of a listed company, Shelga Ltd. During November 2018 there was a material fall in the value of Shelga Ltd’s shares. Analysts attribute the fall in value principally to a fraud dating back to December 2017 that was discovered by Shelga Ltd's management and announced publicly in November 2018. ii.In December 2018, the directors of Da-Rocha Ltd publicly announced a plan to reduce the workforce by 10% as a result of worsening economic conditions. Required: Discuss the effects of each of the above items on the financial statements of Da-Rocha Ltd for the year ended 31 October 2018 in accordance with IAS 10 Events after the Reporting Period B. Mambo Ltd has the following products in inventory at the end of 2019:…
- d. Yompab Ltd is a listed manufacturing company which prepares its financial statements for the year ended 31 October, 2018 in accordance with IFRS. The financial statements aredue to be authorized for issue on 15 January 2019.i. Yompab Ltd holds an investment in the shares of a listed company, Nanoni Ltd. During November 2018 there was a material fall in the value of Nanoni Ltd’s shares. Analystsattribute the fall in value principally to a fraud dating back to December 2017 that was discovered by Nanoni Ltd's management and announced publicly in November 2018.ii. In December 2018, the directors of Yompab Ltd publicly announced a plan to reducethe workforce by 10% as a result of worsening economic conditions.Required:Discuss the effects of each of the above items on the financial statements of Ypmpab Ltd for theyear ended 31 October 2018 in accordance with IAS 10 Events after the Reporting Period.e. After a wedding in 2018, ten people died, possibly as a result of food poisoning…A company failed to record unrealized gains of $38 million on its debt investments classified as trading securities. Its tax rate is 25%. As a result of this error, total shareholders' equity would be:Enola plc has investment in two companies, Sherlock Ltd and Mycroft Ltd. The draft statement of profit/loss as well as the statement of financial position of the three companies for the year ended 31 December 2022 are shown below: Statement of profit/loss for the year ended 31 December 2022 Enola Sherlock Mycroft £ £ £ Revenue 4,000,000 2,000,000 1,500,000 Cost of sales (2,800,000) (1,400,000) (1,050,000) Gross profit 1,200,000 600,000 450,000 Operating expenses (834,000) (350,000) (150,000) Investment income 284,000 Operating profit before interest and tax 650,000 (350,000) (150,000) Finance charge (50,000) Profit before tax 600,000 250,000 300,000 Income tax expense (180,000) (80,000) (90,000) Profit after tax 420,000 170,000 210,000 Statement of financial position as at 31 December 2022 Enola Sherlock Mycroft £ £ £…