Student Number: (enter on the line below)
Student Name: (enter on the line below)
HI6026
Auditing, assurance and compliance
final assessmeNt
Trimester 3, 2022
TIME ALLOWED: 24 hours
Assessment Weight: 50 total marks
Instructions:
All questions must be answered by using the answer boxes provided in this paper.
Completed answers must be submitted to Blackboard by the published due date and time.
Please ensure you follow the submission instructions at the end of this paper,
Purpose:
This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit.
In your own words, explain the different objectives of both tests of controls and substantive tests.
ANSWER: ** Answer box will enlarge as you type
Question 2 (7 marks)
You have been appointed as a senior auditor in charge at Edi & Partners and have observed the following independent and separate audit issues in relation to the external audit of your client Ofdx Ltd.
The accounting processes and the related system at Ofdx Ltd did not work and operate efficiently and effectively throughout the first year of the business operations. Subsequently, some of the books of accounts, such as the general ledger, had to be prepared and updated on the basis of some estimates. The estimates were used because the actual accounting data relating to these balances were missing.
Due to the tight financial resources, the board of directors of Ofdx Ltd did not apply appropriate and effective internal control procedures over the collection of business debts. The turnover of debtors was 4 times.
Due to mounting pressures of tough completions of business rivals, Ofdx Ltd has lately moved its manufacturing operation facility of fashion and related clothing business lines out of the main city into regional zones. Although Ofdx Ltd saves about 25% in costs with this strategic move, the manufacturing and production process requires more time than before, which delays the deliveries and has caused the company to lose customers and, consequently, sales.
Required:
In your own words, explain the implications of each of the above independent and separate audit issues on your assessment and evaluation of the related audit risk. You also need to explain the implications on the materiality level and the audit strategy employed.
ANSWER:
Question 3 (7 marks)
In your opinion and your own words, explain what could be the factors that may impact the determination and identification of an appropriate benchmark for deciding on the materiality of the financial report.
ANSWER:
Question 4 (7 marks)
In relation to the financial statement audit, in your own words, explain the differences between transaction-related controls and management-related controls.
ANSWER:
Question 5 (11 marks)
In your own words, explain your opinion in relation to the ongoing argument of permitting or not permitting practising auditors to provide or not provide non-audit services to their clients. You need to Justify your opinion/answer
ANSWER:
Question 6 (11 marks)
For better audit quality, auditors are required to understand the business structure and the environment in which the business operates. In addition, auditors prepare audit strategies and programs before the audit.
In your own words, explain the rationality and the importance on the basis of which auditors justify the importance and the requirements of developing both an “Audit Strategy and Audit Program” for the audit to be professionally conducted.
ANSWER:
END OF FINAL ASSESSMENT
Before you submit your assessment, please check the following:
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Once you have checked the above:
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