Explain what further evidence you would seek in relation, Auditing

Assignment Help:

1. On 5 August 2012, the financial controller informed you that the board has recently received a letter from the assistant general manager, Mr. Tan. The letter contains a confession: Mr. Tan has been lodging fraudulent expense claims over the past 5 years, amounting to some $40,000. The financial controller's preliminary estimates indicate that this figure is materially correct; however he believes it will take at least another 2 months before the exact figure is known. The police had been informed of the fraud and are searching for Mr. Tan, who appears to have left the country.

2. On 17 August 2012, the financial controller informed you that on the previous day a participant on one of the club's aerobics classes, Ms. Peters, injured herself after slipping on the gym floor. Ms. Peters is the spouse of one of the state's leading barristers. A preliminary letter has already been received from Mr. Peters, stating that Ms. Peters intends to take legal action to recover the costs of medical treatment, plus damages, from the club.

3. On 18 August 2012, the financial controller informed you that a serious fire occurred at one of the club's kitchens during football celebrations. Although covered by insurance, the fire caused extensive damage to the bistro area and the adjacent bar. Both the bistro and bar are expected to remain unserviceable until at least mid-September, resulting in an expected fall in revenue of around 7%.

4. On 23 August 2012, the general manager informed you that on 18 August 2012 the board decided to sell land it was holding as a long term investment. It seemed that a very generous offer was made by an overseas buyer. The contract is due to be signed on 25 August 2012.

5. On 11 August 2012, the board signed a contract for the upgrade of the club's air-conditioning system. The upgrade is necessary to ensure compliance with workers compensation regulations. The first payment of $100,000 is due on 1 September 2012. Work will be completed (and the final contract payment made) by 30 June 2012.

Required

(a) Explain what further evidence you would seek in relation to each of these matters.
(b) Describe the action, if any, you would recommend to management in relation to the accounting treatment of each items.


Related Discussions:- Explain what further evidence you would seek in relation

Balance sheet and income statement, OBJECTIVES To apply certain st...

OBJECTIVES To apply certain steps in the audit planning process, with emphasis on risk identification and audit response (strategy) thereto. To provide you with the exp

Profesional ethic, Ask quesThe following situations involve a possible viol...

Ask quesThe following situations involve a possible violation of the MIA ByLaws (on professional ethics, conduct and practice). For each situation, (1) decide whether or not the Co

The business risk approach to auditing, The Business Risk Approach to Audit...

The Business Risk Approach to Auditing In recent years the broader concept of business risk has been developed by the larger firms. It was the subject matter of the ICAEW audit

Difference between internal audit and external audit, Explain The Differenc...

Explain The Difference Between Internal Audit And External Audit?        Ans) The internal audit is performed to help the management. The weakness of the management is disclosed

Audit points - audit process, Audit points - Audit Process Key audit p...

Audit points - Audit Process Key audit points are as 1. Internal control particularly along with regard to computerisation and internal audit.  2. Provision for doubtful

Describe an internal control system, Problem: "If the auditor wishes to...

Problem: "If the auditor wishes to place reliance on internal control,he should ascertain and evaluate those controls and perform compliance tests on their operation" (a) De

Financial institutions and banks - audit situations, Financial Institutions...

Financial Institutions and Banks - Audit Situations Financial Institutions Because of the recent collapse of many financial institutions, this is still a heavily regu

Disclosures about inventories - ias 2, Disclosures about Inventories - IAS ...

Disclosures about Inventories - IAS 2 IAS 2 specifies disclosures about inventories. In a large manufacturing company, no article in the balance sheet appears verification

Experts as a source of audit evidence, Experts as a source of Audit Evidenc...

Experts as a source of Audit Evidence Mostly the auditor's work on evidence obtained from along within the entity supported through confirmations from third parties will provi

Code of ethics for auditor, B. The following situations involve a possible ...

B. The following situations involve a possible violation of the MIA ByLaws (on professional ethics, conduct and practice). For each situation, (1) decide whether or not the Code ha

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd