You are the auditor of Banku Ltd. While conducting the audit of the company for the year ended 31 December 2017, you wanted to refer to the minutes book but the Board of Directors refused to give these books to you. Required: Discuss the implications of the directors’ action.
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You are the auditor of Banku Ltd. While conducting the audit of the company for the year ended 31 December 2017, you wanted to refer to the minutes book but the Board of Directors refused to give these books to you. Required: Discuss the implications of the directors’ action.
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- You are the auditor of Banku Ltd. while conducting the audit of the company for the year ended 31 December 2017 , you wanted to refer to the minutes books but the board of Directors refused to give these books to you . discuss the implications of the directors' actionWhile completing your audit work for the 30 June 2022 audit of Bexca Ltd, you become aware of the following material matters: (i) On 5 July, Blue Pty Ltd, a major customer of Bexca Ltd, was placed into liquidation. As Blue Pty Ltd had confirmed the balance due to Bexca Ltd as at balance date, management of Bexca Ltd has refused to write off or provide for the Blue Pty Ltd account in the 30 June 2022 financial report. However, they are prepared to disclose this information as a note to the financial report. (ii) One of Bexca’ major customers, Leisure Pty Ltd, suffered a fire on 20 July. Since Leisure Pty Ltd was uninsured, it is unlikely that their accounts receivable balance will be paid. (iii) On 25 July, a well-known financial planner advised his clients not to invest in Bexca due to poor long-term growth prospects. The market price for Bexca’s shares subsequently declined by 40%. (iv) A note to the financial report of Bexca Ltd refers to an agreement to sell its major subsidiary,…You have been the auditor of Data Ltd for two years. Your auditor’s report for Data for the year ended 30 June 2018 was unmodified, indicating that in your opinion the financial report gave a true and fair view. In August 2018, Data obtained a large loan from Better Bank Ltd, to provide additional working capital. Subsequently Data suffered severe trading difficulties and was placed into liquidation in late December 2018, with insufficient funds to repay the loan to Better Bank. Required: Outline a defense for your audit firm to any legal action taken by Better Bank to recover its loss.
- A. Griffin audited the financial statements of Dodger Magnificat Corporation for the yearended December 31, 2017. She completed gathering sufficient appropriate evidence onJanuary 30 and later learned of a stock split voted by the board of directors on February 5.The financial statements were changed to reflect the split, and she now needs to dual datethe report on the entity’s financial statements. Which of the following is the proper form?a. December 31, 2017, except as to Note X, which is dated January 30, 2018.b. January 30, 2018, except as to Note X, which is dated February 5, 2018.c. December 31, 2017, except as to Note X, which is dated February 5, 2018.d. February 5, 2018, except for the date of the auditor’s report, for which the date isJanuary 30, 2018.Brown Investments Ltd, is a company based in East London. It has a financial year end of 30 April.At its annual general meeting (that took place in March 2023), the shareholders of Brown Investments Ltd appointed Eagle-Eye Inc. as its external auditor. During the current audit of Brown Investments Ltd.’s financial statements one of the audit team members discovered that taxable income is understated by the Senior Accountant Mr. Hustler, due to a certain amount of the sales having been fraudulently not recorded. Further investigations conducted pointed out that Mr. Hustler deliberately failed to report output tax and he was also underreporting input tax.Mr Hustler was also in the habit of underpaying tax as he thought the government was corrupt and paying tax was a waste of valuable company resources, he opted to increase the salaries of his employees as he felt it was the moral thing to do. The auditors felt that Mr. Hustler’s actions resulted in material understating of the VAT…For each case, state the type of audit opinion which should be expressed and provide an explanation for your choice of audit opinion in each case Mirrabella Pty Ltd has completed the preparation of its financial statements for 2020/2021, but it has decided to exclude the Income Statement. The Chief Financial Officer (CFO) of Mirrabella Pty Ltd explains to you that the users of their financial statements find the Income statement confusing, too long and unnecessary because the Balance Sheet already has the essential information which shareholders require. Accordingly, the CFO has refused to have the Income Statement in the annual report for the year ending 30/06/21. Furthermore, the CFO has implied that Mirrabella Pty Ltd will be seeking to appoint a different auditor for the next audit. ads you to suspect there are likely to be serious operational challenges for BMP Ltd in the next twelve months.
- You are the auditor in charge of the audit of Irene PLC, which has a 30 June year end. The subsequent events review for the year ended 30 June 2022 revealed that, on 1 August 2022, a receiver was appointed at a major customer. At 30 June 2022 that customer owed GHS 150,000 and goods costing GHS 200,000 made to that customer’s specification were held in inventory. Both these amounts are material.RequiredList the matters to which you would direct your attention in respect of the above in relation to the audit for the year ended 30 June 2022, if the audit report on the financial statements has not yet been written.Ambrose is auditing the financial statements of Mays (dated December 31, 2017). The date of the auditor’s report is February 17, 2018, and the audit report release date is February 20, 2018. For which of the following matters would Ambrose have the least responsibility?a. The obsolescence of inventory held on December 31, 2017, that was identified on January 20, 2018.b. A customer’s deteriorating financial condition that was identified on February 19, 2018.c. A merger that was announced by Mays and known by Ambrose on February 12, 2018.d. A major loss due to a catastrophe that occurred and was known by Ambrose on March 1, 2018.Honey Crunch Limited started business in 2018. It is now 2021 and the Board of Directors of Honey Crunch Limited hired Aegis Solutions to recommend how each of the following types of accounting changes or errors should be dealt with. As an audit assistant for Aegis, provide Honey Crunch with this information. For each issue write a note for the audit file (3-5 sentences) identify the type of accounting change or error, the appropriate accounting treatment, include amounts where applicable and how net income would be impacted if the issue needs correcting. 1. In early 2019, Honey Crunch changed its estimate from 5% to 4% of receivables on the amount of bad debt expense to be charged to operations. Bad debt expense for 2018, if a 4% rate had been used, would have been $8,000. The company adjusted Net Income in 2018 to reflect the change. 2. The company changed its method of inventory…
- You have recently been appointed as auditor to Johnson Plc; a company whoseshares are traded on the Stock Exchange. The Directors of Johnson Plc haverecommended that you perform the following services .(i) The statutory audit of the annual financial statements.(ii) Taxation services, and(iii) Consistency services in respect of the implementation of a new informationtechnology systemYour firm has not acted for Johnson Plc before but does act as auditor for one of themajor competitors. (c) A client’s affairs should not be disclosed to third parties. However where a clienthas been guilty of an unlawful act, to whom should the auditor disclose this, andin what order ?While completing your audit work for the 30 June 2019 audit of Greenfield Ltd, you become aware of the following material matters: I. On 5 July, Blue Pty Ltd, a major customer of Greenfield Ltd, was placed into liquidation. As Blue Pty Ltd had confirmed the balance due to Greenfield Ltd as at balance date, management of Greenfield Ltd has refused to write off or provide for the Blue Pty Ltd account in the 30 June 2019 financial report. However, they are prepared to disclose this information as a note to the financial report. II. On 15 July, Greenfield Ltd entered into a new contract to supply wine to Wine Taster, a major new wine store that had set up operations in northern South Australia. The contract was similar in nature to other contracts previously negotiated with other wine stores. Management does not believe that any change to the financial report is required. III. Greenfield Ltd has capitalised significant funds incurred in developing an improved new wine cap that allows the…While completing your audit work for the 30 June 2019 audit of Greenfield Ltd, you become aware of the following material matters: I. On 5 July, Blue Pty Ltd, a major customer of Greenfield Ltd, was placed into liquidation. As Blue Pty Ltd had confirmed the balance due to Greenfield Ltd as at balance date, management of Greenfield Ltd has refused to write off or provide for the Blue Pty Ltd account in the 30 June 2019 financial report. However, they are prepared to disclose this information as a note to the financial report. II. On 15 July, Greenfield Ltd entered into a new contract to supply wine to Wine Taster, a major new wine store that had set up operations in northern South Australia. The contract was similar in nature to other contracts previously negotiated with other wine stores. Management does not believe that any change to the financial report is required. Required:For each independent situation, state the type of audit report that you should issue and give reasons for…