T6 South

Which TWO of th following statements describe the objectives of planning the audit?

• To ensure appropriate attention is devoted to important areas of the audit.

• To assist in the co-ordination of work done by any auditor's experts.

• To ensure that the audit engagment is only accepted if permissible by the ACCA Code of Ethics and Conduct.

• To ensure the audit is completed within budget restraints.

Recalculate the closing balance on the share capital account.

Which assertion does this audit procedure meet?

• Presentation

• Completeness

• Accuracy, Valuation and Allocation

• Existence

Review financial statement notes.

Which assertion does this audit procedure meet?

• Presentation

• Completeness

• Accuracy, Valuation and Allocation

• Existence

Review Memorandum an Articles of Association and compare requirements with issued share capital.

Which assertion does this audit procedure meet?

• Presentation

• Completeness

• Accuracy, Valuation and Allocation

• Existence

Read minutes of board meetings for evidence of share issues recorded.

Which assertion does this audit procedure meet?

• Presentation

• Completeness

• Accuracy, Valuation and Allocation

• Existence

You are concerned that your audit client may have capitalised some items which are revenue in nature, leading to overstatement of NCA. Which of the following statement is a valid response to this audit risk?

• Obtain a copy of the training manual relating to the new till system and discuss with directors the extent of training staff have received on the new system.

• Agree the capitalised costs from the trial balance back to invoices to confirm their value.

• Inspect invoices capitalised within the cost of the new till system to determine whether they are directly attributable to the cost of the new till system.

• Recalculate the depreciation charged on the new till system.

The audit engagement partner is concerned that the new till system may not be reliable, whereby not all sales have been recorded, resulting in understatemnt of revenue; and staff may not yet be familiar with the system, leading to increased risk of input errors. Which TWO of the following statements are valid responses to this audit risk?

• Perform analytical procedures by comparing daily/weekly sales by store with both the prior year and the expectations, in order to determine any unsual patterns.

• Vouch the sales revenue per the system to the till receipts to confirm the accuracy of the sales.

• Obtain a copy of the training manual relating to the new till system and discuss with directors the extent of training staff have received on the new system.

• Agree sales revenue from till receipts to the cashbook to determine the accuracy of till receipts.

You plan to review the legal correspondence relating to the claims made by those customers to whom audit client sold contaminated meat. Which TWO of the following are valid objectives of this audit procedure?

• To determine whether client's resputation will have been damaged within the lcoal area.

• To confirm whether theare are deficiencies in audit client's internal controls relating to food hygiene.

• To assess whether a provision for customer compensation is required in audit client's FS.

• To determine whether disclosure of the nature and financial effect of the legal claim is required in audit client's FS.