| Subject Code : | ACC707 | Country : | Australia |
|---|
Assignment Task -
1-Outline the major risks in a payroll cycle and the assertions related to each risk.
Risk
Padded payroll (fictitious employees)
Overpayment for work performed
Assertion
Occurrence
Accuracy Occurrence
2-You are conducting the audit of Computer World Ltd for the year ended 30 June 2018 and are reviewing the audit working papers for property, plant, and equipment (PPE) prepared by your audit assistant Megan Cartwright. Megan tested the PPE additions and disposals during the year and recalculated the depreciation. No discrepancies were found in the testing. As a result, Megan concluded PPE, which is a material balance, was appropriately valued.
(a) Explain whether the audit team member has arrived at an appropriate conclusion
(b) Describe how your conclusion for part (a) will impact the further conduct of the audit (if at all)
3-George Blewett is the engagement partner for the financial report audit of Play Equipment Ltd for the year ended 30 June 2018. The following material events or transactions have come to George’s attention before he is scheduled to issue his report on 31 August 2018.
(a)On 14 July 2018, Play Equipment settled and paid a personal injury claim of a former employee as a result of an accident that occurred in March 2017. The company has not previously recorded a liability for the claim
(b)On 17 July 2018, Play Equipment agreed to purchase for cash the outstanding shares of Recreational Equipment Ltd. This acquisition is likely to double the sales volume of Play Equipment
(c)On 20 July 2018, the directors become aware of broken glass found in their pre-packaged sandpits. This product had only been on sale for two weeks and had been purchased directly from the manufacturer, Sandpit Ltd, an unrelated company in Thailand, one week prior to being introduced to the public
(d)On 3 August 2018, a plant owned by Play Equipment was damaged in a flood, resulting in an uninsured loss of inventory.
Required
For each of the above events or transactions, identify audit procedures that should have brought the item to the auditor’s attention, and determine the treatment required in the financial report for the year ended 30 June 2018.
3-How does an auditor distinguish between an adjusting event and a non-adjusting event
4-Discuss the three basic types of modifications that can be made to the auditor’s opinion, and outline the circumstances under which each might be issued
You are the audit partner of Preston & Associates, a mid-tier audit firm. You are responsible for the audit of the following three independent entities for the year ended 30 June 2018.
(a) Helping Hand Ltd is a non-profit entity. You have discovered that it has not kept substantiating vouchers or receipts for more than 65 percent of its expenses, excluding salaries and allowances
(b) Skyscraper Ltd is a building contractor with a varying workload. In order to compensate for the irregularity of these contracted building projects, Skyscraper also purchases large vacant blocks of land that it later subdivides for the construction of houses and units. Skyscraper then sells these on its own account. Your analysis strongly suggests that the apportionment of costs to houses and units sold has been kept low in order to boosts profits. In your opinion, this has resulted in the overvaluation of the unsold properties. The directors of the company do not agree and hold to their view that the stocks of properties are correctly valued.
(c) Big Event Ltd arranges for popular overseas entertainment artists to perform in Australia. The band Eclipse was booked by Big Event to play in major cities across the country. Big Event’s written contract required the company to pay the band in US dollars but, in order to reduce costs, it did not hedge the amounts. Subsequent to year-end, the Australian dollar fell against the US dollar and a substantial loss relating to the band’s tour was predicted. The management of Big Event tried unsuccessfully to renegotiate the band’s contract and has been unable to obtain finance to cover the expected shortfall. Big Event has now canceled the tour and expects a substantial claim from Eclipse. It is clear to you, as the auditor that Big Event does not have the income, cash, or other assets to sustain such a loss.
Required
Assuming that all amounts involved are material, identify and discuss the most likely auditor’s opinion that you would issue on each financial report for the year ending 30 June 2018.
This ACC707 - Accounting Assignment has been solved by our Accounting Experts at onlineassignmentbank. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.
Be it a used or new solution, the quality of the work submitted by our assignment Experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose a new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.
