AUDT317 Auditing Editing and Proof Reading Services


Topics to be covered

  1. Assurance and auditing: an overview
  2. Audit regulation, structure of the profession and auditor’s liability
  3. Ethics, independence and corporate governance
  4. Overview of elements of the financial report audit process
  5. Planning, understanding the entity and assessing business risk.
  6. Assessing inherent risk and other specific business risks
  7. Understanding and assessing internal control
  8. Tests of controls
  9. Substantive tests of transactions and balances
  10. Audit sampling
  11. Completion and review
  12. The auditor’s reporting obligations & Revision Lecture

Section 1

1) With respect to illegal acts, the auditor’s responsibility is to:

  1. Design the audit to provide reasonable assurance of detecting illegal acts that are material to the financial report.
  2. uncover all illegal acts
  3. plan the audit to search for illegal acts that could be material to the financial report
  4. rely on the client’s solicitor to identify illegal acts that should be disclosed

2) Earnings management includes:

  1. Intentional violations of accounting standards that are individually immaterial but have the effect of increasing profit materially in aggregate.
  2. inappropriate revenue recognition
  3. ‘Big bath’ charges that make poor results look even worse.
  4. All of the given answers are correct

3) Which of the following is not one of the five components of internal control?

  1. Corporate governance.
  2. Control procedures
  3. Control environment
  4. Information system

Section 2

For each of the bellow independent situation, you are required to indicate the type of audit opinion you would issue, as well as the reasons for issuing the particular audit opinion.

a) A client holds a note receivable consisting of principal and accrued interest receivable. The note’s maker recently filed a voluntary bankruptcy petition, but the client failed to reduce the recorded value of the note to its net realisable value, which is approximately 20 percent of the recorded amount.
b) Recent industrial action has seen trade unions win a pay increase of 4% for all their members. Under the terms of the agreement, the pay increase will be backdated to 1 January 20X7, resulting in a charge equal to 10 % of profit. Management have agreed to the pay increase; however, they have not made any adjustments to the 30 June 20X7 financial report.

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