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

What are possible risks, Oversee commission staff to ensure individuals are...

Oversee commission staff to ensure individuals are properly trained and monitored. please provide me with some risks, controls and audit tests for the process above.

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

What is an audit process, In previous times, the Kings used to hear their a...

In previous times, the Kings used to hear their accountants narrate the accounts verbally. Though, as the complexity of the accounting function grew, require was felt to thoroughly

The use of engagement letters, The Use of Engagement Letters There is a...

The Use of Engagement Letters There is a contractual relationship among an accountant and his client. The accountant must therefore make sure that at the time he decided to exe

Demonstrate knowledge of the current tax and auditing , A municipal village...

A municipal village or a nonprofit organization solicits bids for the annual audit from local audit firms, and the firm with the lowest bid is selected. Answer the following que

Audit Plan for small service company, only needs to be 2 - 3 pages and I ne...

only needs to be 2 - 3 pages and I need help with an audit plan is to look like

Goodwill and business combinations - intangible assets, Goodwill and Busine...

Goodwill and Business Combinations - Intangible Assets Goodwill is the one of most strange of all assets since it cannot be differentiate from the business.  It cannot be sold

Principles of auditors procedures, Principles of Auditors Procedures i...

Principles of Auditors Procedures i. The financial statements should be prepared on the source of conditions existing on the balance sheet date. ii. The material post balance

Auditors procedures during stock taking, Auditors Procedures During Stock T...

Auditors Procedures During Stock Taking The main task during stock taking is to ascertain where the client's employees are carrying out their commands properly. It is particul

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