– Ownership: The auditor needs to verify that there was authority issued for the purchase of an asset by the company.
– Cost: The auditor should verify the cost as given by comparing it with manufacturer or dealers.
– Valuation: This assurance will be acquired by ensuring appropriate depreciation has been charged, so that valuation at year end is reasonable.
– Existence: By physically inspecting the assets, noting down their details.
– Presentation and Disclosure: Here the auditor analysis the classification of the assets,noting distinction between leased assets (if any) and fully owned assets as disclosed in the Balance Sheet.
– In the event of disposal, the auditor should verify issuance of authority to dispose,reason-ability of disposal price and correct recording.
– Check receipt of the disposal price and proper recording in the records.
Wilfykil answered the question on February 22, 2019 at 11:21
-
Bafu Ltd., a private limited company, manufactures a wide range of bathroom fittings. These fittings are made from steel components which are chromed in small...
(Solved)
Bafu Ltd., a private limited company, manufactures a wide range of bathroom fittings. These fittings are made from steel components which are chromed in small vats. The steel components are sourced from outside suppliers. The year end stock mainly consists of these steel components and finished items. As at 31 October 2004, the total stock was valued at Sh. 6,048,000 out of total assets of Sh. 19,200,000. This stock figure was obtained by a physical count as at 31 October 2004, and valuation by reference to purchase invoices and manufacturing cost estimates.
Required:
With reference to each of the matters listed below, state the work you would do to conclude whether the amount attributed to stock is fairly stated.
(a) Quantities
(b) Identification of stock items
(c) Condition of stock items
(d) Cut-off procedures
(e) Valuation of stock
Date posted:
February 22, 2019
.
Answers (1)
-
List any four advantages of standardized audit working papers
(Solved)
List any four advantages of standardized audit working papers
Date posted:
February 22, 2019
.
Answers (1)
-
Identify the type of information audit trainees should include in the audit working papers.
(Solved)
Identify the type of information audit trainees should include in the audit working papers.
Date posted:
February 22, 2019
.
Answers (1)
-
Provide audit trainees with guidelines on how they should prepare audit working papers.
(Solved)
Provide audit trainees with guidelines on how they should prepare audit working papers.
Date posted:
February 22, 2019
.
Answers (1)
-
Explain the importance of audit working papers.
(Solved)
Explain the importance of audit working papers.
Date posted:
February 22, 2019
.
Answers (1)
-
Identify and briefly explain the statutory and ethical matters you would consider before accepting appointment as an auditor of a company
(Solved)
Identify and briefly explain the statutory and ethical matters you would consider before accepting appointment as an auditor of a company
Date posted:
February 22, 2019
.
Answers (1)
-
Identify and briefly explain any four inherent limitations of an internal control system
(Solved)
Identify and briefly explain any four inherent limitations of an internal control system
Date posted:
February 22, 2019
.
Answers (1)
-
What purpose does an internal control system serve in an organization?
(Solved)
What purpose does an internal control system serve in an organization?
Date posted:
February 22, 2019
.
Answers (1)
-
Identify and briefly explain the three key elements of a good internal control system.
(Solved)
Identify and briefly explain the three key elements of a good internal control system.
Date posted:
February 22, 2019
.
Answers (1)
-
In the context of the Companies Act (Cap. 486), state the rights of an auditor
(Solved)
In the context of the Companies Act (Cap. 486), state the rights of an auditor
Date posted:
February 22, 2019
.
Answers (1)
-
Outline the professional guidelines that would assist the external auditor in avoiding being unduly dependent on a single client
(Solved)
Outline the professional guidelines that would assist the external auditor in avoiding being unduly dependent on a single client
Date posted:
February 22, 2019
.
Answers (1)
-
Identify any four circumstances under which an interim audit would be ideal.
(Solved)
Identify any four circumstances under which an interim audit would be ideal.
Date posted:
February 22, 2019
.
Answers (1)
-
Explain how you would use a computer audit programme to verify the year-end debtors balances
(Solved)
Explain how you would use a computer audit programme to verify the year-end debtors balances
Date posted:
February 22, 2019
.
Answers (1)
-
Identify and briefly explain four situations under which an auditor would consider qualification of his audit report
(Solved)
Identify and briefly explain four situations under which an auditor would consider qualification of his audit report
Date posted:
February 22, 2019
.
Answers (1)
-
Identify four common problems that may hinder the proper implementation of an audit plan
(Solved)
Identify four common problems that may hinder the proper implementation of an audit plan
Date posted:
February 22, 2019
.
Answers (1)
-
You have recently been appointed external auditor of ABC Ltd. What typical planning procedures would you undertake when planning the audit of ABC Ltd.?
(Solved)
You have recently been appointed external auditor of ABC Ltd. What typical planning procedures would you undertake when planning the audit of ABC Ltd.?
Date posted:
February 22, 2019
.
Answers (1)
-
Briefly explain the ways in which the directors of a company discharge their duties with regard to the prevention and detection of errors and irregularities
(Solved)
Briefly explain the ways in which the directors of a company discharge their duties with regard to the prevention and detection of errors and irregularities
Date posted:
February 22, 2019
.
Answers (1)
-
What are ?errors and irregularities in the contest of an external audit of a limited company?
(Solved)
What are ―errors and irregularities in the contest of an external audit of a limited company?
Date posted:
February 22, 2019
.
Answers (1)
-
Outline the audit work you would undertake to obtain reasonable assurance that the following items appearing in the balance sheet of Ujuzi Ltd. are not...
(Solved)
Outline the audit work you would undertake to obtain reasonable assurance that the following items appearing in the balance sheet of Ujuzi Ltd. are not materially misstated:
(i) Trade creditors
(ii) Specific provision for bad and doubtful debts.
Date posted:
February 22, 2019
.
Answers (1)
-
Explain the reliability of bank statements as audit evidence.
(Solved)
Explain the reliability of bank statements as audit evidence.
Date posted:
February 22, 2019
.
Answers (1)