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brandonfullers · 5 years ago

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Monthly Market Outlook – March

February was a negative month for Stock markets and a positive one for safe haven bets as markets reacted to the fast spread of the coronavirus outside of China. Worries soared over the potential impact of the virus on global growth, with a focus on vulnerable global supply chains. The Dollar moved higher, underpinned by the relative robustness of the US economy, in contrast to the drop in the 10-year T-note yield to record lows as data releases confirmed the view of a US slowdown. Coupled with the latter is the view that the US economy’s relative robustness may be challenged by the impact of the coronavirus, which has recently dented the appeal of the Dollar as a safe haven currency, at least relative to some major currencies.

Click the button below for a FREE copy of our Monthly insights for March 2020 and get an overview of some of the key events for the month ahead.

CLICK HERE FOR THE .PDF VERSION OF THE OUTLOOK

CURRENCIES

Dollar:The Dollar started off the month quite weak, even though it continues to register as the strongest main currency on the year-to-date, with USDIndex gains of around 2%. The reason behind this was the fact that markets were fully factoring in a 50 bp rate cut by the Fed at its upcoming March 18th meeting, a side effect of which has been recent weakness in the Dollar. Surprisingly however, the Fed cut rates by 50 bp on March 3rd, which had been discounted, albeit coming sooner than expected. Positioning in the Fed funds market fully factors in a follow-up 25 bp easing at the approaching March 18th FOMC meeting, which would wipe out the three quarter-point hikes of 2019. From the economic data perspective, fundamentals on the US economy remain strong without much disruption to the economy yet from Covid-19, even though global and US outlooks for the near-term were mostly for modest growth with the coronavirus and the upcoming presidential election cited as potential risks.

Euro:Developments in the Euro continued to be more positive than expected, supporting the gradual recovery scenario in the Eurozone, but the reports were largely dismissed as backward looking given the looming impact of the coronavirus. The manufacturing sector, however, remains in overall contraction territory, despite the pace of contraction slowing for a second consecutive month while the labor market remained robust. Meanwhile, March started with weak inflation on the 1st, while the ECB meeting on March 12 is expected to join the Fed in adding stimulus to offset the drag on growth projected from the coronavirus. Lastly, given the negative yields and apparent exposure to the coronavirus in the Eurozone coming at a time when German growth is sputtering as demand for its exports dives, and as the US Treasury market remains a top safe haven for global capital, Euro faces a lot of risks. Offsetting this to a degree, will be the generally better performing US economy relative to Europe.

Sterling: February saw a continuation of the Sterling decline on the risk of the UK leaving the post-Brexit transition period at the end of the year without a new trading deal with the EU, and partly as the currency found itself on the list of those vulnerable to a prolonged phase of risk aversion in global markets sell-off, given the reliance on foreign investment to fund the UK’s current account deficit. Given that January and February economic data showed a post-election rebound in economic activity in the UK, Brexit remains a concern, while the BoE meeting is on March 26, with the markets pricing in a 50/50 chance for the central bank to deliver a 25 bp rate cut.

Yen: The Japanese currency was a gainer against the Dollar in February. Trade performance was exceptional, driven in part by markets discounting Fed easing and in part by safe haven demand for the Japanese currency, along with repatriation of overseas capital by Japanese investors as fears mount about the global economic disruption caused by measures being taken to contain the COVID-19 virus. The Japan economy meanwhile contracted -6.3% in Q4, while February’s data continued indicating contraction especially in the manufacturing sector. GDP and trade balance are released on March 8th, CPI on March 18th, the BoJ’s decision on the 19th, Tokyo CPI on the 26th and Industrial Production on the 30th.

Aussie: The Aussie started the month stronger against its US counterpart, following a strong plunge in 2020 to 11-year low areas, which registered it as the weakest of the year out of the main currencies. In general the antipodean crosses are widely seen as barometers of risk appetite in global markets, hence as Aussie is a currency proxy of China, it should be no surprise that it has been underperforming amid the prevailing risk-off carnage from the coronavirus outbreak. The Australian economy is exposed given that Asia accounts for most of the demand for its exports, with the RBA signalling that it is prepared to ease monetary policy further to support the Australian economy, after cutting interest rates by 25 bp on March 3. The RBA cut rates as part of further easing in Australia that had already been on the cards before the virus hit.

Loonie: The Loonie managed to extend its losses against the Dollar in February. The gain partly reflects outperformance in the US Dollar and partly underperformance in the Canadian currency, which has been concomitant with a 3%-plus dive in oil prices. The Canadian currency will likely remain subject to near-term volatility as long as the coronavirus contagion remains in a state of increasing spread. Weak oil prices, along with a relatively soft Canadian economy, partially driven by ongoing railway blockades and prospects for global slowing due to the coronavirus could continue adding pressure on the Canadian Dollar. The BoC delivered a hefty 50 bp cut, following on the heels of the FOMC this month.

COMMODITIES

Commodity prices were crushed further in February amid expectations that global demand would be undercut.

Gold: Gold gained significantly in January thanks to safe haven demand, while February was mixed as Gold futures climbed to a year-best $1,659 by late February from $1,586.71. Gold has continued its upwards trend, but been unable to cross over the 1700 mark yet. The rise in Gold was initially aided by safe haven demand but also by the decrease in the 10-year bond yield. Further aggressive easing from the core central banks could allow Gold to retain its gains.

Oil: Oil continued its downwards trend in February, ending the month around the $45 mark, edging back to nearly $47.00 in early March. Crude Oil is now well below the 8-month high close of $63.27 in early January that was due to escalating US-Iran tensions and later on due to the “epidemic”. However, despite OPEC+ output cuts just yesterday which was nearly triple than expected, Oil prices are expected to remain weak in the medium term as inventories keep rising amid lower oil demand due to the coronavirus outbreak.

INDICES

US: Coronavirus uncertainties finally caught up with equities in the second half of February, sending Wall Street sharply lower into month end. Following the FOMC, the USA30 extended declines to a 12% tumble from its all-time high. The USA100 dropped 12% compared to a record high close. The USA500 contracted 11% versus an all-time high of 3,386.15 on February 19. This was the fastest decline from an all-time high in the index’s history, with the speed beating the Black Monday plunge in October 1987. The Fed’s stimulus measures and hopes for coordinated additional stimulus moves globally helped the Stock markets as this could help the Fed to protect the economy from the coronavirus impact. However, the FOMC’s hefty rate cut may not do much to inoculate the economy from the coronavirus, or impact supply chains. But it does fit in with the asymmetric bias from the Fed amid its concerns over low inflation.

Europe: Stock markets in continental Europe moved in tandem with the US exchanges, as the GER30 and UK100 continued their decline, despite mixed economic data releases, which supported the gradual recovery. The biggest losers ın February were the IBEX35 (Madrid, Spain) and FTMIB (Milan, Italy), as markets reacted negatively to the news that Italy is the European country most impacted by the virus so far with the important tourism sector severely disrupted and public life increasingly restricted.

Japan:On a 1-year basis, JPY225 gains contracted to just 1% (was 11%) as virus fear prompted players to unload Asian equities. The Japanese economy underperformed in Q4 2019. A sales tax increase during the quarter was expected to knock growth lower, but the contraction in total GDP was worse than feared, leaving the economy on a weak footing as the nation and world grapples with the coronavirus outbreak in Q1.

CRYPTOS

Bitcoin ended February reverting more than 50% of this year’s gains, closing at the $8413 mark after significant volatility during the month as it traded in the red in the second half. Given the bullish start to the year for cryptos, along with the observation that Bitcoin gained significantly less than its peers, there is likely to be an increased focus on the alternative coins as a potential area for growth. Particular attention will be paid to Bitcoin cash, Ripple and Stellar.

Following a 2-month high volatility regime, and its peak this year, Bitcoin managed to sustain more than 50% of the crypto’s 1-year value. The current price stands above even the $9000 mark, as the future of Bitcoin appears to be uncertain, given the absence of fundamentals to price its value upon. It is expected that its future will be heavily affected by the halving event taking place in May. The reward halving, during which the number of new bitcoins being issued are cut by 50%, takes place every four years in BTC’s case. Its near term future meanwhile could be affected by both global economic and political uncertainty, as bitcoin has been reacting as both a risk-on and risk-off asset at the same time lately.

BONDS

US10Year:Global bond yields moved sharply lower in February as safe haven demand soared on escalating concern over the coronavirus and the market priced in increasingly aggressive policy responses from central banks. This development caused the US Treasury Note to drop by 0.936% in the wake of the FOMC’s rate cut from 1.53% at the beginning of February. However, if the Fed commits to declining rates further in 2020 more downward pressure should be put on the yield.

*All data and references for the above were obtained from the following sources (unless otherwise specified): Analysis (various articles), Economic Calendar, and the MT4 platform.

Click here to access the HotForex Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Monthly Market Outlook – March published first on https://alphaex-capital.blogspot.com/

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ultraironbouquetdreamuniver-blog · 6 years ago

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Test Bank for Foundations of Multinational Financial Management 6th Edition by Shapiro Sarin

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Now updated and reorganized, Alan Shapiro’s Foundations of Multinational Financial Management, 6/e emphasizes broad concepts and practices, and provides a clear conceptual framework for analyzing key financial decisions in multinational firms. The text treats international financial management as a natural and logical extension of the principles learned in the foundations course in financial management. Thus, it builds on and extends the valuation framework provided by domestic corporate finance to account for dimensions unique to international finance.

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Table of Contents

PART I: ENVIRONMENT OF INTERNATIONAL FINANCIAL MANAGEMENT 1

Chapter 1. Introduction: Multinational enterprise and Multinational financial Management.

Chapter 2. The Determination of Exchange Rates.

Chapter 3. The International Monetary System.

Chapter 4. Parity Conditions in International Finance and Currency Forecasting.

Chapter 5. The Balance of Payments and International Economic Linkages.

Part II: FOREIGN EXCHANGE AND DERIVATIVES MARKETS

Chapter 6. The Foreign Exchange Market.

Chapter 7. Currency Futures and Options Markets.

Chapter 8. Swaps and Interest Rates Derivatives.

PART III: FOREIGN EXCHANGE RISK MANAGEMENT

Chapter 9. Measuring and Managing Translation and Transaction Exposure.

Chapter 10. Measuring and Managing Economic Exposure.

PART IV: FOREIGN MARKETS AND INVESTMENTS

Chapter 11. Country Risk Analysis.

Chapter 12. International Financing and National Capital Markets.

Chapter 13. International Portfolio Investment.

Chapter 14. Capital Budgeting for the Multinational Corporation.

PART V: FINANCING AND CONTROLLING MULTINATIONAL OPERATIONS

Chapter 15. Financing Foreign Trade.

Chapter 16. Managing the Multinational Financial System.

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jackjohnson73me-blog · 7 years ago

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New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

By clicking the SUBMIT button I certify that this assignment is my own work, based on my own personal study and research, and that I have acknowledged all material and sources in the preparation of this assignment, whether they be books, articles reports, lecture notes, images, videos, any other kind of document or personal communication.

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

The assignment may be completed manually, or with the use of an electronic spreadsheet, word processing software or with the use of accounting software. Marks may be deducted for illegible or partially illegible papers. If completed using multiple file formats or manually, the document must be combined into one document, in PDF format2.

Resubmission

As a general rule resubmission of assessment items is NOT possible, however the Lecturer may ask for resubmission if it is deemed appropriate. Details for such resubmission will be made available by the Lecturer if and when the situation occurs.

Oral Test or Viva Voce

Lecturers may, at their discretion, ask students to verbally present their assignment submissions or rewrite some selected part/s of their answer in a controlled setting. Lecturers may exercise this discretion where they feel that the assignment was

not the stu den t’ s ow n w ork.

University Plagiarism policy

Plagiarism is the unacknowledged use of material written or produced by others or a rework of your own material. All sources of information and ideas used in assignments must be referenced. This applies whether the information is from a book, journal article, the internet, or a previous essay you wrote or the assignment of a friend. Plagiarism policy is available at:

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Exceptions will only be made where assignments are late due to special circumstances that are supported by documentary evidence, and may be subject to a penalty of 5% of assignment marks per day. Partially completed assignments will be accepted with appropriate loss of marks for the incomplete portion.

Should students foresee potential difficulties with submission of assessment items, they should contact the lecturer immediately the difficulties come to notice, to discuss suitable arrangements etc for the submission of those assessment times. An Application for Assignment Extension or Special Consideration should be completed and provided to the Head of School, School of Law and Business.

This application form, explanation and instructions is available on the ACT303 CDU Learnline course site or direct from http://learnline.cdu.edu.au/units/lb_school_templates/deployed/assignment_extension.docx

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Leaving a request for an extension, special assessment or special consideration until the last moment, based on grounds that students could have reasonably been able to foresee, may result in the application being rejected.

Ensure that you maintain suitable backup copies of your assignment during preparation, before completion and after lodgement. Loss of data/assignment due to failure to maintain a suitable backup will not constitute grounds for an extension.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

You have been approached to accept the audit of Pharmaceuticals Ltd (Pharmaceuticals), a medium- sized chemical manufacturer. The manufacture of the chemicals results in highly toxic waste and Pharmaceuticals is currently under investigation by the Environmental Protection Agency for a significant spill of toxic chemicals into a nearby river. The media have reported that senior employees were allegedly involved in trying to cover up the spill.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Pharmaceuticals Ltd (Pharmaceuticals) imports a number of pharmaceutical products. In order to hedge its foreign currency transactions, Pharmaceuticals entered into a number of forward rate agreements this year. Prior to this time Pharmaceuticals had had little exposure to derivative instruments, but a series of bad experiences resulting from fluctuating exchange rates convinced the company that a hedging strategy was necessary. During planning for the audit of Pharmaceuticals, the company’s hedging arrangements were identified as inherently risky and increased testing was carried out in this area. A number of small errors were noted in accounting for hedge transactions, but there did not appear to be any material errors and as such no adjustments were made. A review of the audit file suggests that the errors noted were a result of inexperience and poor controls in the area. While all of the errors were brought to the attention of the treasurer, who is responsible for the company’s hedging strategy, no further action has been taken to date.

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Billings & Associates has agreed to take on a new audit client, Reaction Pty Ltd, a small garage door manufacturer that has never previously been audited. Billings & Associates has issued an engagement letter prior to commencing work for the current year. While conducting the audit, the audit team is unable to gain sufficient appropriate audit evidence around accounts receivable due to a lack of documentation. You have informed client management that you need to issue a modified auditor’s report due to the scope limitation. In response, management has requested that the engagement become a review engagement with the associated lower level of assurance, as they are not required to have an audit.

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

You are the auditor of Hail Pty Ltd a medium sized furniture manufacturer. Your audit firm has finalised the financial statements after the client has substantially prepared the accounting records. However, the client admits to having limited knowledge of identifying and calculating impairment and has asked for your assistance. You have proposed a number of adjustments to account for the impairment of assets.

You are the auditor of Travel Time Ltd, a large travel agent that also handles all your audit firms travel arrangements on normal commercial rates and provides excellent service. The managing director of Travel Time has indicated that the company is having a tough time of it due to the lack of consumer confidence in the economy at the moment and has asked if you could help by recommending their services to your other audit clients. He has said that he will understand if you are not able to do so. You happily agree to provide the recommendation, as you have always been satisfied with their service.

Your audit firm has been approached by a new client, Civil Constructions Ltd, to conduct the audit for the coming year. As part of your client acceptance procedures, you identify that the wife of one of the audit firm’s partners has a substantial shareholding in Civil Constructions Ltd.

Your audit client, Pleasure Cruises Ltd, is having cash flow problems and has not paid any of the current year’s fee by the time the auditor’s report is due to be issued. They expect business to pick up in the coming year and have requested an additional time to pay the bill.

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

Toy Universe Pty Ltd (TUPL) is a toy manufacturer. TUPL has factories across the country and its customer base includes retailers, as well as individuals, to whom direct sales are made through their website. You are an audit senior at Harley Quinn & Associates and you are currently reviewing documentation of TUPL’s internal controls in preparation for the interim audit.

TUPL’s website allows individuals to order goods directly and full payment is taken in advance. Currently the website is not integrated into the inventory system and inventory levels are not checked at the time when orders are placed.

Goods are delivered via local couriers; however, the couriers do not always record customer signatures as proof that the customer has received the goods. Over the past year, there have been customer complaints about the delay between sales orders and receipt of goods. TUPL has investigated these complaints and found that, in each case, the sales order had been entered into the sales system correctly, but was not forwarded to the despatch department for fulfilling.

TUPL’s retail customers undergo credit checks prior to being accepted and credit limits are set accordingly by sales ledger clerks. Neither the sales area managers nor the sales director are involved with this process. These customers place their orders through one of the sales team, who decides on sales discount levels.

Raw materials are purchased from a wide range of suppliers. As a result of staff changes in the purchase ledger department, supplier statement reconciliations are no longer performed. Additionally, changes to existing supplier details or inclusion of new supplier details in the purchase ledger master file can be undertaken by purchase ledger clerks, as well as supervisors.

In the past six months, TUPL has changed part of its manufacturing process and as a result some new equipment has been purchased. However, there are now considerable levels of plant and equipment that are now surplus to requirement. Purchase requisitions for all new equipment have been authorised by production supervisors and little has been done to reduce the surplus of old equipment.

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

You are the senior auditor on the audit of Unique Furniture Manufacturers Pty Ltd (Unique). Your firm has recently been appointed as the first auditors of the company. You interview the managing director of the company to obtain background information on Unique and to understand its business operations, its environment and system of internal control. Unique was founded 30 years ago and makes ‘grandfather’ clocks (freestanding, weightdriven, pendulum clocks). The clocks are made in one factory (situated in the Blue Mountains) and are distributed through boutique homeware and antique furniture stores. The clocks are advertised mainly in local newspapers and through pamphlet drops.

In order to promote longer production runs and minimise finished goods stocks, Unique’s retail distributors are offered stock on a ‘sale or return’ basis. This means that the homeware and antique furniture stores are invoiced immediately, subject to a 90-day term of payment, but are allowed to return the stock up to 30 days before payment is due. Only the marketing manager has been given the authority to make these offers. All of Unique’s timber is obtained from offshore sources. Timber prices, which are denominated in US dollars, have risen substantially over the past two years and the recent drop in the value of the Australian dollar has caused them to rise even further. Timber purchases are secured by providing Unique’s suppliers with letters of credit which become due when the

container shipment of timber arrives in Australia. Labour costs are high due to the craftsmanship and quality required for the production of the grandfather clocks. Skilled labour is not easy to obtain and wage rates have recently risen. Unique has found it difficult to pass on these timber and labour price increases to customers.

An analysis of costs indicates that there have been material negative purchase price variances in purchases of timber over the course of the year. You have compiled the following information from Unique’s financials:

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

Unique’s bank finances the company’s timber purchases using bills of exchange drawn at 90 days from the date of payment of the shipment. It has also extended loan finance to Unique. The bank covenant, which is due for review shortly, requires Unique to:

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

 prepare a general purpose financial report for the year ended 30 June 2017 and have it audited according to Australian Auditing Standards. (Note that this is a requirement of the bank covenant as Unique is not required to produce a general purpose financial report under the Corporations Act 2001.)

Part C.1 Required:

For parts (a), (b) and (c) of this question, please disregard all going concern considerations. Based on the background information above and your use of preliminary analytical procedures, answer the following questions:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

After examining Unique’s detailed trial balance, you notice that one of the expenses of the sales and marketing department is ‘sales bonuses’. You question this expense and the company’s accountant informs you that a monthly bonus of 10% of salary is paid to all sales and marketing staff if sales for the month exceed the budgeted target. The marketing manager is entitled to a 20% bonus if the targets are achieved. This incentive was implemented during the previous financial year and was in place for the last six months of the year. You note that the bonus has been paid every month since the incentive was implemented (except for the previous month, when sales were much lower than expected). This seems a little unusual because Unique had only achieved its budgeted sales targets in two out of the six months prior to the start of the scheme. You investigate results for the last six months of the year and find that:

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

(c) Identify one (1) account balance at risk and its two (2) assertions at risk as a result of the fraud risk factors identified in (b) above. Justify your answer with reference to the background scenario. (4 marks)

(d) Describe two (2) audit procedures that would address potential misstatements arising from fraudulent financial reporting. Ensure that your procedures are specific to the scenario and the fraud risk factors identified in (b) above. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

In March 20X6, Sali decided to move from the SuperD IT system to the SuperB IT system. The expected completion date of the transition was June 20X7. Due diligence was performed on the new system and another auditor (PGD) was engaged to perform data migration work. KMC liaised with PGD on several occasions to obtain access to their workpapers in order to obtain sufficient appropriate audit evidence around the data migration. No major issues were noted.

Ten well-regarded staff members of Sali were made redundant in April 20X7, and as a result, staff morale is very low at Sali. Employees are wondering who will go next, and do not feel that their jobs are safe. Most of them are putting in extra hours, but despite this, the lack of motivation is seriously impacting the quality of their work. Some senior staff members have decided to search the current job market for another suitable positions.

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

The purchase occurred on 29 June 20X7, and most entities take a week to provide the associated documentation. We made an urgent request to Dune Ltd, obtained the purchase document, and sent them to the KMC office on 7 July 20X7.

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

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jameswilson53-blog · 7 years ago

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New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

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nuramukhtar64-blog · 7 years ago

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New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

oliversmith63-blog · 7 years ago

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New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

kayaknight666-blog · 7 years ago

Photo

New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

amritpalsandhu4-blog · 7 years ago

Photo

New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

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johnmartin63-blog · 7 years ago

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New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

alicebrown52-blog · 7 years ago

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New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

sonia221us-blog · 7 years ago

Photo

New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

mirceacazacu94-blog · 7 years ago

Photo

New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

estherbernasko3-blog · 7 years ago

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New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes

biancaghetes222-blog · 7 years ago

Photo

New Post has been published on https://punjabassignmenthelp.com/act303-principles-auditing/

ACT303 Principles of Auditing

UNIT CODE: ACT303

UNIT NAME: PRINCIPLES OF AUDITING

Written Assignment Information

Semester 1 2018

Total Marks: 60 marks and to be weighted @ 20% Length: Maximum 3,000 words

Submission Requirements.

This assignment may be submitted at or before 11.59pm (CST) Sunday, 6 May 2018, Study Week 9

Assignments are to be submitted by one of the following means;

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER’S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

Submit your Assignment as one document, using PDF or Word doc format1 .

The assignment must conform to the requirements set out in this assignment

The assignment must be lodged online via the ACT303 Learnline Assignment Lodgement link on the ACT303

Learnline site.

Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs.

Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected.

DO NOT LODGE VIA EMAIL or FAX – assignments lodged by email or fax will not be accepted.

KEEP A COPY – Ensure you have a copy of the assignment lodged.

Coversheet

Coversheets are no longer required.

Students will now be required to affirm at the point of submission that the work they are submitting is their original work. This is built into the submission point.

The submission text reads as follows:

I also certify that this assignment has not previously been submitted for assessment in any other course or at any other time

in the same course (except as a DRAFT submission) and that I have not copied in part or whole or otherwise plagiarised the work of other students and/or persons.

I have read Charles Darwin University’s Academic and Scientific Misconduct Policy (pol-001) and Student Breach of

Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf and understand its implications.

1 Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Format

Resubmission

Oral Test or Viva Voce

not the stu den t’ s ow n w ork.

University Plagiarism policy

http://www.cdu.edu.au/governance/policies/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/procedures/pro-092.pdf

Extensions and Late Lodgements

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE HEAD OF SCHOOL.

Please note that it is now Faculty policy that all extension requests must be approved by the Head of School. The lecturer is no longer able to personally approve extension requests.

Instructions for creating PDF documents and/or combining documents of different formats are provided on the

Learnline site.

Assignment Details

Part A (20 marks)

Part A-1

You are an audit partner with Billings & Associates, a large and experienced audit firm.

Required:

Identify and explain the key ethical matter regarding Pharmaceuticals and its management that you should consider before making the decision to accept the engagement. (2 Marks)

Part A-2

Required:

Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response. (2 Marks)

Part A-3

Required:

Outline the appropriate response to this situation. Provide reasons to support your response. (4 Marks)

Part A-4

Consider the following independent situations:

Required:

For each of the independent situations above:

a) Identify the type of potential threat to independence. Justify your answer. (8 marks)

b) Describe a safeguard, if any, which could be implemented to reduce each of the independence threats. (4 marks)

Part B (10 marks)

Background

REQUIRED:

a) Identify five (5) deficiencies in the internal controls of TUPL. Explain how a business risk arises from each deficiency. (5 marks)

b) Describe a control which TUPL could implement to address each of these deficiencies. (2.5 marks)

c) Design a test of control Harley Quinn & Associates would perform to assess if each of those controls identified in (b) above is operating effectively. (2.5 marks)

You may wish to present your answer in a table format, as follows:

(a) Deficiency Explanation (b) Control (c) Test of control

Part C (20 marks)

Background

 the current ratio as at 30 June 2017 is 1.24

 on an annualised basis, net sales are $350,000

 the shareholders’ funds to total assets ratio is 30%

 gross profit margins and net profit margins for the year ended 30 June 2017 have dropped to the level where losses are being incurred.

 maintain a current ratio of 1.2

 maintain a shareholders’ funds to total assets ratio of at least 30%

 maintain net sales of a minimum of $100,000 per quarter

Part C.1 Required:

(a) Identify and explain two (2) asset accounts at risk of material misstatement. (4 marks) (b) Describe one (1) issue regarding the prior year’s figures. (1 mark)

(d) Disregarding the evaluation of management’s assessment of the going concern assumption, briefly describe the effect of the facts on your audit planning. (3 marks)

Part C.2

 sales were above the monthly budget figure when bonuses were paid

 there was no significant change in gross margins

 returns of stock sold on the ‘sale or return’ basis were well below those in the first six months except in the final month of the year

 debtors’ levels (measured in days outstanding) were above their budgeted levels but returned to a more normal level at year end.

On further enquiry, the accountant advises that the marketing manager is authorised to do the following with regard to the stock sold on a ‘sale or return’ basis:

 offer customers a ‘sale or return’ deal as long as the deal is within the company’s pricing structures and the terms of the scheme

 initiate and approve the invoicing of customers when a sale is made (i.e. if the stock is not returned within 60 days)

 initiate and approve the issue of credit notes for these customers when returns are made within 60 days or when pricing or quality issues arise.

Part C.2 Required

Based on the information to Part C.2, answer the following questions: (a) Explain one (1) internal control issue at Unique. (1 mark)

(b) Identify two (2) fraud risk factors at Unique. (2 marks)

Part D (10 marks)

Phil, an audit senior at KMC Partners (KMC) is currently reviewing the materiality level for one of his clients, Sali Ltd (Sali).

It is now 8 July 20X7 and the audit team is currently finalising its substantive testing and tests of controls. Phil becomes aware of the following events:

Event Description

1 Sali’s finance manager abruptly resigned in June 20X7, and no replacement has been found.

2 Sali’s HR manager resigned in June 20X7, and a replacement was found in July 20X7.

3 While performing a full reconciliation of data on SuperD to data on SuperB as at 30 June

20X7, two material variances were discovered. Phil inquired with management who confirmed that these were errors that will be fixed.

4 While finalising the controls testing of the unlisted investments, the audit team note an issue with one of the 40 samples selected for testing:

Description of Issue:

No purchase document on file for Dune Ltd which makes up 14% of the unlisted investments.

Response by Sali:

REQUIRED:

Determine the impact of each event on the materiality amount (increase, decrease, no impact). Explain your answers. (10 marks)

You may wish to present your answer in a table format, as follows:

Event Description Impact on

Materiality

Explanation

*** End of Assignment***

#ACT303 Principles of auditing

0 notes