Answers
AUE3761 ASSIGNMENT 1 2020
Year module Auditing 3761 Assignment 1
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
3 reviews
By: melindi74 • 4 year ago
By: Nix123 • 4 year ago
By: savannawilliamson95 • 4 year ago
Content preview
Question 1a) Risk indicators b) Description of audit risks of material
misstatement at the financial statement
level,
1. Organisation of Happychef being sued by 1, This is an inherent risk as there is already
Mr Wok, executive director. negative publicity for the company due to
numerous reports in the media. The AFS might
also be materially misstated as entity is facing
liable legal damages. This might indicate not
properly accounting for and/or disclosing the
going concern assumption.
2. Loss of significant customers and 2, Risk is inherent due to AFS may be materially
suppliers. misstated as an error occurring due to
fraudulent activities in the sales budget for the
past nine months leading it to not achieving
targets. The entity might oppose a going concern
threat due to hiding fraudulent reporting.
3. The entity made changes accounting 3, This control risk may result to AFS being
software. materially misstated in error of old accounting
system transferring the financial data to the new
accounting system, this might not be 100% tested
and ineffective at a later stage.
4. New audit clients 4, The following risk exist
- The services of AU & DIT Incorporated
were discontinued and newly appointed
auditors of the company was ISA
Incorporated. This is detection risk to AFS
being materially misstated due to error,
as there were a different auditors prior
resulting to the opening balances that
might be incorrect.
- The AFS may be materially misstated due
to error, as material misstatements could
go undetected because they are not
familiar with the client. References
5. Using work of a third party. 5, The entity may inherent the risk by appointing
Comtech Incorporated to perform specialised
audit. The third party might be competent and
appropriately qualified to perform the audit of
the entity therefore, the AFS might be materially
misstated.
6. Management’s integrity being 6, As the entity looses customers due to poor
questionable. economic environment leading to control and
inherent risk, the AFS may lead to materially
misstated due to error and fraud the control
environment might be compromised by the
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through EFT, credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Ian09. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R150,00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
52510 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now