Get Cheapest Assignment in Australia, UK, US, UAE, Canada and NZ Order Now

HA3032 Auditing Tutorial

0 Comments

Assessment Task – Tutorial Questions Assignment

Get Assignment Help for HA3032 Auditing tutorial solution

Price: 80 AUD

Order now: Punjabassignmenthelp@gmail.com

Call or whats app: +918053884564

Unit Code: HA3032 Unit Name: Auditing

Assignment: Tutorial Questions Assignment (Individual) Due: Week 13 – Friday 16th  October 2020 (11:30PM) Weighting: 50%

Total Mark: 50 Marks

Purpose:

This assignment is designed to assess your level of knowledge of the key topics covered in this unit

Unit Learning Outcomes Assessed:

1.    Demonstrate a thorough understanding of the reporting requirements of auditing standards relating to auditors’reports.

2.    Explainhowtheauditplanningprocessdirectstheauditortoobtainadequate evidence to support audit findings and address the importance of materiality in an audit.

3.    Explaintheprocessofauditplanningtodetermineriskassessmentsandanoverallaudit strategy.

4.    Explain the auditors’ obligations with regards to understanding the client’s

business and internal controls and assessing business risks.

5.    Achieve a high level of competence in applying prescribed auditing techniques in gathering evidence to satisfy audit assertions.

Description:

Each week students were provided with three tutorial questions of varying degrees of difficulty. These  tutorial  questions  are  available  in  the  Tutorial  Folder  for  each  week  on  Blackboard.  The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions from weeks

3 ,4 ,5 ,6 ,7 & 11 inclusive and submit these answers in a single document.

1

The questions to be answered are:

Question 1                                                                                                         (7 marks)

(This question is from the Week 3 Tutorial)

You have reviewed the work performed by your assistant, Raymond Snow, on the audit of Tin Ltd for the year ended 30 June 20X8 and you have noted the following two independent matters:

(i)      In testing investments in listed securities, Raymond selected all shareholdings with a market value  above  $200,000  and  checked  them  to  the  closing  market  value  reported  by  the Australian Stock Exchange (ASX) to determine the net realisable value of each shareholding. The items tested totaled $5,500,000 or 60% of the total balance.  Of the items tested, only one error of $110,000 was discovered.   Raymond concluded that the error was not itself material, as it was only 2% of the balance tested.   He extrapolated this error to the total population and estimated that the error for the total population would be $185,000, which was also immaterial. Therefore, he concluded that the investments in listed securities were fairly stated at the lower of cost or net realisable value.

(ii)     Tin Ltd has 1,000 stock lines that are maintained on a perpetual inventory system.  Stock is counted on a cyclical basis so that all lines are covered at least once per year.   Raymond attended the March stocktake to observe the counting procedures and conducted 20 test counts from the floor to the client’s count sheets and 20 from the client’s count sheets to the floor.  He uncovered two minor discrepancies of one item each, which he considered to be immaterial.   The client also uncovered five minor discrepancies between the perpetual records and the actual quantity on hand.  None of these discrepancies were adjusted on the perpetual records, as the amounts involved only totaled $50,000 and were considered to be immaterial.   Raymond concluded that no further work was considered necessary on stock quantities at year end.

Required:

(a)         In your own words, explain what is meant by sufficient appropriate audit evidence. (2 marks)

(b)         Explain whether sufficient appropriate audit evidence has been obtained for each of the above situations. Give reasons for your answer.  (5 marks)

(Word Limit: Minimum of 250 words. Maximum of 300 words)

Question 2                                                                                                       (7 marks)

(This question is from the Week 4 Tutorial)

The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008:

Ratio                                       Actual results

Budgeted results

Previous year

Industry Average

Current ratio                           1.97                     1.92                   1.87                         1.92

Quick asset ratio                     1.06                     1.06                   1.06                         1.11

Inventory turnover                 4.21                     4.91                   4.86                         4.76

Net profit ratio                       0.05                     0.03                   0.03                         0.03

Gross margin                           0.65                     0.59                   0.61                         0.61

Required:

Provide four (4) possible explanations for the results of the various ratios for Nova Ltd and explain their implications for the audit. (7marks)

(Word Limit: Minimum of 200 words. Maximum 250 of words)

Question 3                                                                                                         (7 marks)

(This question is from the Week 5 Tutorial)

Everyday Supplies Pty Ltd is a single-store retailer that sells a variety of tools, garden supplies, timber,  small  appliances,  and  electrical  fixtures  to the  public,  although  about  half  of  Everyday Supplies’ sales are to construction contractors on account.

Retail customers pay for merchandise by cash or credit card at cash registers when merchandise is purchased. A contractor may purchase merchandise on account, if approved by the credit manager based only on the manager’s familiarity with the contractor’s reputation. After credit is approved, the sales associate files a prenumbered charge form with the accounts receivable supervisor to set up the receivable.

The  accounts  receivable  supervisor  independently  verifies  the  pricing  and other  details  on  the charge form by reference to a management – authorised price list, corrects any errors, prepares the invoice, and supervises a part-time employee who mails the invoice to the contractor. The accounts  receivable  supervisor  electronically  posts  the  details  of  the  invoice  in  the  accounts receivable  subsidiary  ledger;  simultaneously,  the  transaction’s  details  are  transmitted  to  the bookkeeper.  The  accounts  receivable  supervisor  also  prepares  a  monthly  computer-generated accounts receivable subsidiary ledger without a reconciliation with the accounts receivable control account and a monthly report of overdue accounts.

The cash receipts functions are performed by the cashier, who also supervises the cash register clerks. The cashier opens the mail, compares each cheque with the enclosed remittance advice, stamps each cheque “for deposit only”, and lists cheques for deposit. The cashier then gives the remittance  advices  to  the  bookkeeper  for  recording.  The  cashier  deposits  the  cheques  daily, separate from the daily deposit of cash register receipts. The cashier retains the verified deposit slips to assist in reconciling the monthly bank statements, but forwards to the bookkeeper a copy of the daily cash register summary. The cashier does not have access to the journals or ledgers.

The bookkeeper receives the details of transactions from the accounts receivable supervisor and the  cashier  for  journalising  and  positing  to  the  general  ledger.  After  recording  the  remittance advices  received  from  the  cashier,  the  bookkeeper  electronically  transmits  the  remittance information to the accounts receivable supervisor for subsidiary ledger updating. The bookkeeper sends monthly statements to contractors with unpaid balances upon receipt of the monthly report of  overdue  balances  from  the  accounts  receivable  supervisor.  The  bookkeeper  authorises  the accounts receivable supervisor to write off accounts as uncollectible when six months have passed since  the  initial  overdue  notice  was  sent.  At  this  time,  the  credit  manager  is  notified  by  the bookkeeper not to grant additional credit to that contractor.

Required:

Describe five (5) internal control weaknesses in Everyday Supplies’ internal control for the cash receipts and billing functions (5 marks) and explain why they are weaknesses for two (2) that you have identified.  (2 marks)

(Word Limit: Minimum of 550 words. Maximum of 600 words)

Question 4                                                                                                         (7 marks)

(This question is from the Week 6 Tutorial)

During your review of the audit field work completed by a new junior employee of the audit firm, John Smith, you have noted many areas which require additional review notes. John, who has just completed the interim audit of Taxon Ltd for the year ended 30 June 2019, has just performed testing of controls. When testing controls over payments made to related parties, there should be evidence of approval and sign-off by the chief financial officer (CFO). John selected a sample of payments made to related parties and vouched them back to the electronic funds transfer (EFT) forms to sight the CFO’s signature of approval. Based on a sample of ten payments, six had been approved by the CFO in writing. However, the remaining four EFT forms (for immaterial amounts) did not have the CFO’s signature, but John noted that the CFO had given verbal approval. John concluded that because all internal controls were working, the audit team could use analytical procedures alone to audit payments made to related parties.

Required:

Based on the results of the testing of controls outlined above, determine whether John has arrived at the appropriate conclusion? (1 mark)

Justify  your  answer  by  addressing  the  following  areas:  the  risks  associated  with  related  party transactions, and the reliability of controls at Taxon Ltd.  (6 marks)

(Word Limit: Minimum of 150 words. Maximum of 600 words)

Question 5                                                                                                     (11 marks)

(This question is from the Week 7 Tutorial)

Magi Chen is the managing director of Sun Construction Pty Ltd, a family owned business that provides  construction  services.  As  Magi  is  interested  in  purchasing  some  new  construction equipment’s for her business, she has approached her local bank for finance. The bank has asked that Magi provide an audited financial statement to assist them in considering her loan application. Magi  has  approached  your  audit  firm for  this  service  and  you  have  been  allocated  the  task of auditing Sun Construction for the year ended 30 June 2019. You have undertaken a preliminary review of the business and determined that a substantive testing approach would be suitable and appropriate. You are currently preparing an audit program for the revenue cycle. The following information has been obtained from your review:

• Magi usually works 120 hours a fortnight. Part of this time is spent travelling between different clients and is not charged to the clients. The remaining time is charged at $60 per hour, regardless of the task undertaken.

• Customers typically pay Magi in cash for the work undertaken, except for a small number of

regular small-business customers. Magi allows these customers to pay on account by bank transfer on a monthly basis.

• Magi supplies each cash customer with a written receipt, prepared manually from a receipt book purchased at the local news-agency. The book contains pre-numbered blank receipts, which are completed in duplicate.

Required:

For each of the assertions of occurrence, completeness and accuracy, identify a procedure(s) you could use to audit Sun Construction’s revenue. (11 marks)

(Word Limit: Minimum of 150 words. Maximum of 200 words)

Question 6                                                                                                      (11 marks)

(This question is from the Week 11 Tutorial)

Several firms have internal audit function to govern their business operations. The head of internal audit  department  of  one  of  your  clients  has  invited  you  to  give  a  talk  to  the  members  of  his department during their annual training week. He would like your views on the different roles of external  and  internal  auditors,  the  type  of  work  that  each  carry  out  and  their  reporting responsibilities.

Required:

Draft notes that you will use when giving your talk, paying particular attention to the differences and similarities of the following features of internal and external auditors:

(i)          independence; (3 marks)

(ii)         the work carried out on systems of internal control and operations; (4 marks) (iii)        reporting responsibilities. (4 marks)

(Word Limit: Minimum of 550 words. Maximum of 600 words)

Submission Directions

The assignment will be submitted via Blackboard.  Each student will be permitted only ONE submission to Blackboard.  You need to ensure that the document submitted is the correct one.

Academic Integrity

Holmes Institute is committed to ensuring and upholding Academic Integrity, as Academic Integrity is integral to maintaining academic quality and the reputation of Holmes’ graduates. Accordingly, all assessment tasks need to comply with academic integrity guidelines.  Table 1 identifies the six categories of Academic Integrity breaches.  If you have any questions about Academic Integrity issues related to your assessment tasks, please consult your lecturer or tutor for relevant referencing guidelines and support resources.  Many of these resources can also be found through the Study Skills link on Blackboard.

Academic Integrity breaches are a serious offence punishable by penalties that may range from deduction of marks, failure of the assessment task or unit involved, suspension of course enrolment, or cancellation of course enrolment.

Table 1: Six Categories of Academic Integrity breaches

Plagiarism                           Reproducing the work of someone else without attribution.

When a student submits their own work on multiple occasions this is known as self-plagiarism.

Collusion                             Working with one or more other individuals to complete an assignment, in a way that is not authorised.

Copying                                Reproducing and submitting the work of another student, with or without their knowledge. If a student fails to take reasonable precautions to prevent their own original work from being copied, this may also be considered an offence.

Impersonation                   Falsely presenting oneself, or engaging someone else to present as oneself, in an in-person examination.

Contract cheating              Contracting a third party to complete an assessment task, generally in exchange for money or other manner of payment.

Data fabrication and falsification

Source: INQAAHE, 2020

Manipulating or inventing data with the intent of supporting false conclusions, including manipulating images.

If any words or ideas used the assignment submission do not represent your original words or ideas, you must cite all relevant sources and make clear the extent to which such sources were used.

In addition, written assignments that are similar or identical to those of another student is also a violation of the Holmes Institute’s Academic Conduct and Integrity policy. The consequence for a violation of this policy can incur a range of penalties varying from a 50% penalty through suspension of enrolment.  The penalty would be dependent on the extent of academic misconduct and your history of academic misconduct issues.

All assessments will be automatically submitted to Safe-Assign to assess their originality.

Further Information:

For further information and additional learning resources please refer to your Discussion Board for the unit.

Check out other Tutorial Assignments for Holmes

HI6005 MOG Tutorial

HI5015 Legal Aspects Tutorial Assignment

HI6006 Competitive Strategy Tutorial Solution

HI5016 International Trade Tutorial Solution

HI5004 Marketing Tutorial Solution

HC2112 Marketing and relationship marketing Tutorial

HC2022 Marketing Research Tutorial

HC1082 Marketing Tutorial

HC1062 Decision making and Problem solving Tutorial

HI6005 MOG Tutorial Solution

HI6006 CS Tutorial Solution

HI5016 International Trade Tutorial Solution

HI5004 Marketing Tutorial Solution

Service Marketing Tutorial Solution

HC2022 Marketing Research Tutorial Solution

HA1022 Principles of Financial Management Tutorial Solution

HA2042 Accounting Information System Tutorial Solution