Features of audit working papers:
•• All working papers (without exception) should show by whom they were prepared and when, and when they were reviewed and/or updated, and by whom, by means of signatures and dates – these may be electronic in the case of electronic working papers.
•• Audit planning documentation should include the risk assessment which should be cross referenced to the audit program, and the audit program should be cross referenced to the audit working papers and vice versa.
•• Working papers showing the work performed should be cross referenced to the audit program and the lead schedule on that particular section of the audit file, and should describe the nature of the work performed, the evidence obtained, and the conclusions reached.
•• Each section of the audit file should have a lead schedule which should be cross referenced back to the relevant working papers.
•• Trial balances should be cross referenced back to the relevant section of the audit file, and cross referenced forward to the financial statements.
•• The financial statements should be cross referenced to the trial balance.
•• Schedules of unadjusted differences should be cross referenced to the sections of the file to which they relate.
•• Schedules of review points should all be ‘cleared’ to show that all outstanding matters have been dealt with.
Wilfykil answered the question on April 12, 2019 at 08:52
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Explain the following controlling procedures in a well planned audit:
• Direction and supervision of work
• Review and co-coordination of work
• Quality controls
(Solved)
Explain the following controlling procedures in a well planned audit:
• Direction and supervision of work
• Review and co-coordination of work
• Quality controls
Date posted:
April 12, 2019
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Answers (1)
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You are an audit manager in McKay & Co, a firm of Chartered Certified Accountants. You are preparing the engagement letter for the audit of...
(Solved)
You are an audit manager in McKay & Co, a firm of Chartered Certified Accountants. You are preparing the engagement letter for the audit of Ancients; a public limited liability company, for the year ending 30 June 2006.Ancients has grown rapidly over the past few years, and is now one of your firm’s most important clients. Ancients has been an audit client for eight years and McKay & Co has provided audit, taxation and management consultancy advice during this time. The client has been satisfied with the services provided, although the taxation fee for the period to 31 December 2005 remains unpaid. Audit personnel available for this year’s audit are most of the staff from last year, including Mr. Grace, an audit partner and Mr. Jones, an audit senior. Mr. Grace has been the audit partner since Ancients became an audit client. You are aware that Allyson Grace, the daughter of Mr. Grace, has recently been appointed the financial director at Ancients. To celebrate her new appointment, Allyson has suggested taking all of the audit staff out to an expensive restaurant prior to the start of the audit work for this year.
Required:
Identify and explain the risks to independence arising in carrying out your audit of Ancients for the
year ending 30 June 2006, and suggest ways of mitigating each of the risks you identify.
Date posted:
April 12, 2019
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Answers (1)
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Explain the situations where an auditor may disclose confidential information about a client.
(Solved)
Explain the situations where an auditor may disclose confidential information about a client.
Date posted:
April 12, 2019
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Answers (1)
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a) Describe the matters to consider within your firm and the other procedures that must be
undertaken before accepting the appointment as auditor to a new...
(Solved)
a) Describe the matters to consider within your firm and the other procedures that must be
undertaken before accepting the appointment as auditor to a new client.
b) Explain why it would be inappropriate to commence the audit before consideration of
the matters and the procedures referred to in (a) above have been completed.
Date posted:
April 12, 2019
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Answers (1)
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The objectivity of the external auditor may be threatened or appear to be threatened where:
(Solved)
The objectivity of the external auditor may be threatened or appear to be threatened where:
i. There is undue dependence on any audit client or group of clients.
ii. The firm, its partners or staff have any financial interest in an audit client.
iii. There are family or other close personal or business relationships between the firm, its
partners or staff and the audit client.
iv. The firm provides other services to audit clients.
Required:
a) For each of the four examples given above, explain why the objectivity of the external
auditor may be threatened, or appear to be threatened, and why the threat is important.
b) Describe requirements that reduce the threats to auditor objectivity for each of the four examples given above.
Date posted:
April 12, 2019
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Answers (1)
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The purpose of an external audit and its role are not well understood. You have been asked to
write some material for inclusion in your firm’s...
(Solved)
The purpose of an external audit and its role are not well understood. You have been asked to
write some material for inclusion in your firm’s training materials dealing with these issues in the
audit of large companies.
Draft explanation dealing with the purpose of an external audit and its role in the audit of large
companies, for inclusion in your firm’s training materials.
Date posted:
April 12, 2019
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Answers (1)
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Restmount Kenya Ltd. was formed on 1 October 2006 in order to export tea and coffee to
European markets. The Directors are unsure as to their...
(Solved)
Restmount Kenya Ltd. was formed on 1 October 2006 in order to export tea and coffee to
European markets. The Directors are unsure as to their responsibilities and the nature of their
relationship with the external auditors. The audit partner has asked you to visit the client and
explain to the directors, the fundamental aspects of the accountability of the directors and their
relationship with the auditor.
Required:
Explain to the directors of Restmount Kenya Ltd.
a. The need for an audit
b. Procedures for the appointment of an auditor of a public company under the Companies Act.
c. Directors responsibilities in relation to the accounting function of the Company.
d. Auditors’ statutory responsibilities in relation to the audit of the company’s financial statements.
Date posted:
April 12, 2019
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Answers (1)
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What is Debtors’ circularization and what are it's purposes?
(Solved)
What is Debtors’ circularization and what are it's purposes?
Date posted:
April 12, 2019
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Answers (1)
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Discuss on the types of circularization during auditing
(Solved)
Discuss on the types of circularization during auditing
Date posted:
April 12, 2019
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Answers (1)
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What is the problem encountered in the verification of stock during auditing?
(Solved)
What is the problem encountered in the verification of stock during auditing?
Date posted:
April 12, 2019
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Answers (1)
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Which are the qualities of a good audit sample?
(Solved)
Which are the qualities of a good audit sample?
Date posted:
April 11, 2019
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Answers (1)
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Which are the factors considered before adopting statistical sampling?
(Solved)
Which are the factors considered before adopting statistical sampling?
Date posted:
April 11, 2019
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Answers (1)
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Which are the disadvantages of statistical sampling?
(Solved)
Which are the disadvantages of statistical sampling?
Date posted:
April 11, 2019
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Answers (1)
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Give the disadvantages of judgmental sampling
(Solved)
Give the disadvantages of judgmental sampling
Date posted:
April 11, 2019
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Answers (1)
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Give cases where sampling is inappropriate
(Solved)
Give cases where sampling is inappropriate
Date posted:
April 11, 2019
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Answers (1)
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Give the reasons for audit sampling
(Solved)
Give the reasons for audit sampling
Date posted:
April 11, 2019
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Answers (1)
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Which are the qualities of audit evidence?
(Solved)
Which are the qualities of audit evidence?
Date posted:
April 11, 2019
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Answers (1)
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What actions are taken when internal control system is identified as weak?
(Solved)
What actions are taken when internal control system is identified as weak?
Date posted:
April 11, 2019
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Answers (1)
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Which are the problems in developing and implementing audit plan?
(Solved)
Which are the problems in developing and implementing audit plan?
Date posted:
April 11, 2019
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Answers (1)
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Discuss Professional Ethics in auditing
(Solved)
Discuss Professional Ethics in auditing
Date posted:
April 11, 2019
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Answers (1)