Exam (elaborations)
2022 Mock Exam 1
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- Institution
Topics covered in this mock exam paper: Pre-engagement, Risk assessment and Internal control
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AuditingTOPICS COVERED: Pre-engagement
Risk assessment
Internal control
, AUE Integrated Question test 1 Reading time: 12 minutes
Background information:
You are a first-year trainee accountant at CA Campus Inc. (herein referred to as CAC)
a firm of registered auditors. CAC is a medium-sized audit firm in South Africa with
offices situated in all the major cities. CAC has audit clients in a range of industries,
however their expertise lies in the financial service industry.
On the 6th of January 2020 Paula Green (CEO and acting CFO) of Burger Queen
Limited (herein referred to as Burger Queen) called in a favour from lifelong friend
Tom Softy, an audit Partner at CAC, to accept the appointment as external auditor of
Burger Queen for the year ended 29 February 2020. Paula Green was beside herself
after the previous auditors resigned citing scope limitations as the reason.
Paula Green provided Tom Softy with sufficient background information on the
business for Tom Softy to accept the engagement.
Tom Softy excused two newly employed first year trainees (you being one of them)
from their induction ceremony to make up the audit team and provided them with the
following information on Burger Queen:
Paula Green and Sandy Eco are environmental activists. Their dream to save the
planet lead them to founding Burger Queen a vegan take on fast food. Burger Queen
was established in 2014 and has encountered extraordinary growth in its 6 years of
existence. What started out as one outlet In Cape Town City Centre has grown into 6
restaurants throughout South Africa?
Burger Queen sources organic produce from all over the world to make the healthiest
vegan burgers in town. Customers rave about the burgers not only looking great, but
tasting as good as the best beef burger around.
Burger Queen received the BeVeg stamp of approval certifying that the restaurant
meets the stringent vegan standards set by the BeVeg organisation. This entitles
Burger Queen to use the BeVeg logo advertising that Burger Queen is certified
vegan. The BeVeg logo is proudly displayed on each of the 6 restaurant windows.
Tom Softy informed the two first year trainees to direct any questions at Paula Green
since the previous CFO resigned in December last year. Paula Green has requested
that the audit team bear with her as she isn’t familiar with all the audit requirements.
She has however made a list of events that took place in the current period for the
audit team to start planning the audit:
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