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AUI3701 Assignment 4 Solutions 2021
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AUI3701 ASSIGNMENT 4 SOLUTIONS 2021 SEMEMSTER 1 AND 2QUESTION 1
Question 1 (20 marks)
Aggie Moloi works in an audit firm (AuditSmart Inc) that provides external and internal audit
services.
Aggie was assigned as the internal auditor for Sawubona Ltd. Sawubona Ltd manufactures
various tinned foods to major supermarkets nationwide. This is the first audit AuditSmart Inc
has provided to Sawubona Ltd.
Aggie was very excited to start the audit despite having a vague recollection of the preliminary
survey procedures. However, since she had not kept any notes from university, she decided to
conduct the preliminary survey using her limited knowledge.
Aggie knew she had to have a meeting with the client’s management, so she immediately drove
over to Sawubona Ltd. The audit client was not expecting her and was not available for a
meeting. Aggie decided to have a meeting with the available clerks at the company. They
chatted in general about how the company works and how all the departments fit in with each
other. Satisfied with her meeting, Aggie walked alone through the premises and was amazed
at the machinery they have.
During her walk, one clerk gave her Sawubona Ltd’s financial statements to browse through.
She quickly analysed the financial statements and compared the ratios to the previous year’s
figures.
REQUIRED MARKS
, (20)
Briefly describe the recommended correct steps of a preliminary
survey and criticise how Aggie conducted her preliminary survey. Answer this
question by using the following table format:
Basic preliminary survey steps Examples of Aggie’s deviation
from the recommended
(10 marks)
preliminary survey step
(10 marks)
An initial study should be An initial study should be
conducted at the office of the conducted at the office of the
internal audit activity to obtain as internal audit activity to obtain as
much information as possible on the much information as possible on the
operations of the auditee operations of the auditee
Documents should be compiled to Tumi did not have any documents,
assist the internal auditor with the even her notes from college and
preliminary survey, and documents decided to conduct the preliminary
on the structure, regulations and survey using her limited
operations of the auditee should be knowledge.
collected
Reminder lists should be compiled No reminder lists were prepared to
to guide the internal auditor during guide Tumi during the execution of
the execution of the preliminary the preliminary survey and this
survey.
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