Reference no: EM133171292
Question - You are the senior internal auditor of Tech Crunch. Tech Crunch is an engineering firm. Each member of the senior management team has an equal ownership interest in the firm. You are planning an audit of the fraud risks in Tech. Crunch. As part of your planning, you have held discussions with the senior management team and made the following notes to the file:
Tech Crunch recently moved its offices to a prime real estate building that is in the centre of the city.
The company has grown rapidly, and has several large contracts with new clients. The management team would like to continue growing the business through mergers and acquisitions.
Deposits on contracts have increased, particularly near the end of each month. The management team noted that there were some reconciliation issues pertaining to these deposits.
Debt levels have increased. The lender has a restrictive covenant that must be met or the loan will be recalled.
Expenses have remained flat over the last few years. The main expense is salaries. A freeze on wages has been put in place, given the current economic environment.
Cash flow has been an issue in the past, but management is confident that this issue has been resolved through improved planning and co-ordination of contracts.
The firm's engineering registration with the provincial engineering licensing body expired on August 31 of the current year under audit. It was renewed on October 15 of the same year. During the period between August 31 and October 14, the firm continued to engage in contracts.
You recognize that some of the notes you took during this meeting relate to fraud risk factors.
Required -
a. Prepare for the Chief Audit Executive (CAE) a note to file containing a planning memorandum that summarizes the fraud risk indicators. The planning memorandum should only include those items from your notes made during the meeting that pertain to fraud, as the CAE only wants to address fraud issues that may impact the audit. You must include a minimum of four fraud risk indicators in the memorandum and, for each one of them, identify the relevant fraud risk condition within the fraud triangle.
b. Discuss how fraud will change the overall audit approach for Tech Crunch.
|
SITXMGT002 Establish and conduct business relationships
: SITXMGT002 Establish and conduct business relationships Assignment Help and Solution - What communication techniques can you use to help build trust and respect
|
|
What is the MAXIMUM amount Force Ten can contribute
: If Zahra earns $75,000 and the money purchase limit for the year is $25,370, what is the MAXIMUM amount Force Ten can contribute to the DPSP on behalf of Zahra
|
|
Construct the monthly budgets for Sunrise Inc
: Construct the following monthly budgets for Sunrise Inc. for the three months from January 2022 to March 2022: Cash budget
|
|
What is the cost of sales for the month of December
: On December 1, the accounts payable per file was P110,000, and on December 31, it was P140,000. What is the cost of sales for the month of December
|
|
Summarizes the fraud risk indicators
: Prepare for the Chief Audit Executive (CAE) a note to file containing a planning memorandum that summarizes the fraud risk indicators
|
|
Calculate the income of the shareholder
: For each of the above transactions, calculate: (i) the income of the shareholder, (ii) the PUC of the shares to the corporation after the transaction
|
|
What is the journal entry to record the sale of the shares
: Penne Pharmaceuticals sold 7 million shares of its $1 par common stock to provide funds for research and development. What is the journal entry to record sale
|
|
What was balance in accumulated other comprehensive income
: What was the balance in accumulated other comprehensive income in last year's balance sheet
|
|
Prepare the stockholders equity section
: Paid-in capital in excess of par value, common stock 246,000. Prepare the stockholders' equity section after the October 11 treasury stock purchase
|