Question and answer
Consider each of the following situations, which are independent of each other: a) Your audit plan for sales places substantial reliance on the system of internal control and the use of analytical
review. Your testing of the internal control system for sales has found a significant number of instances where clients’ credit ratings have not been checked and abnormally large discounts have been given. The sales manager states that these changes have been the result of difficulties in maintaining past sales levels. b) You are carrying out the annual audit of a tractor retailer. You are aware of significant problems in the rural industry over the past six months and little improvement is in sight. c) Since the last audit your client has introduced a new management compensation scheme with the result that top managers’ salaries are closely tied to the company’s’ profitability. d) Management informs you that during the year the internal auditors discovered that a substantial amount of stock had disappeared from a small branch of your client. A number of local managers have subsequently resigned although there were no prosecutions. The loss equalled 1% of the company’s operating profit. e) Since your last audit the client has introduced a new computer information system for inventory to replace the manual system. Management has indicated that the big advantage of the new system over the old one is that it provides information on inventory levels and gross margins for both product line and geographical area. f) A new competitor of your client entered the market two months before year end and, since that time, selling prices have fallen significantly. Your inquiries have revealed that the industry expects heavy discounting to continue for the whole of next year. g) The organization has introduced an internal audit department in the second quarter of the year. The section consists of three staff. The chief Internal Auditor is a former “Big 6” audit manager with 10 years experience in the profession. He has no internal audit experience. He reports direct to the Managing Director. Since joining the firm he has spent most of his time examining the internal control systems of the company. He is assisted by one new graduate and another person who has two years of internal audit experience and is presently in his third year part-time of a commerce degree. h) There were neither major disposals nor additions to fixed assets during the period. Fixed assets are not material and consist mainly of furniture and fittings Required: Assume you are responsible for constructing an audit plan in each of the situations discussed above. In each case describe how the situation posed would affect your audit plan. Include reference to the nature and /or extent of audit evidence to be collected.
Can you please give me the question one by one?
Get an answer
Original conversation
User: Consider each of the following situations, which are independent of each other: a) Your audit plan for sales places substantial reliance on the system of internal control and the use of analytical review. Your testing of the internal control system for sales has found a significant number of instances where clients’ credit ratings have not been checked and abnormally large discounts have been given. The sales manager states that these changes have been the result of difficulties in maintaining past sales levels. b) You are carrying out the annual audit of a tractor retailer. You are aware of significant problems in the rural industry over the past six months and little improvement is in sight. c) Since the last audit your client has introduced a new management compensation scheme with the result that top managers’ salaries are closely tied to the company’s’ profitability. d) Management informs you that during the year the internal auditors discovered that a substantial amount of stock had disappeared from a small branch of your client. A number of local managers have subsequently resigned although there were no prosecutions. The loss equalled 1% of the company’s operating profit. e) Since your last audit the client has introduced a new computer information system for inventory to replace the manual system. Management has indicated that the big advantage of the new system over the old one is that it provides information on inventory levels and gross margins for both product line and geographical area. f) A new competitor of your client entered the market two months before year end and, since that time, selling prices have fallen significantly. Your inquiries have revealed that the industry expects heavy discounting to continue for the whole of next year. g) The organization has introduced an internal audit department in the second quarter of the year. The section consists of three staff. The chief Internal Auditor is a former “Big 6” audit manager with 10 years experience in the profession. He has no internal audit experience. He reports direct to the Managing Director. Since joining the firm he has spent most of his time examining the internal control systems of the company. He is assisted by one new graduate and another person who has two years of internal audit experience and is presently in his third year part-time of a commerce degree. h) There were neither major disposals nor additions to fixed assets during the period. Fixed assets are not material and consist mainly of furniture and fittings Required: Assume you are responsible for constructing an audit plan in each of the situations discussed above. In each case describe how the situation posed would affect your audit plan. Include reference to the nature and /or extent of audit evidence to be collected.

Weegy: Can you please give me the question one by one?
Expert answered|MoStWaNteD|Points 1920|

User: ok sua

Weegy: Thank you, please provide me your first question.
Expert answered|MoStWaNteD|Points 1920|

Question
Asked 10/12/2010 2:11:16 PM
0 Answers/Comments
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
Questions asked by the same visitor
a) There were neither major disposals nor additions to fixed assets during the period. Fixed assets are not material and consist mainly of furniture and fittings Assume you are responsible for constructing an audit plan in each of the situations discussed above. In each case describe how the situation posed would affect your audit plan. Include reference to the nature and /or extent of audit evidence to be collected.
Weegy: Can you please give me the question one by one? User: a) There were neither major disposals nor additions to fixed assets during the period. Fixed assets are not material and consist mainly of furniture and fittings Assume you are responsible for constructing an audit plan in each of the situations discussed above. In each case describe how the situation posed would affect your audit plan. Include reference to the nature and /or extent of audit evidence to be collected. (More)
Question
Expert Answered
Asked 10/12/2010 2:22:51 PM
0 Answers/Comments
0 questions answered
Popular Conversations
3x - 4y = 7 3x + 2y = -5 When the second equation is subtracted from ...
Weegy: -6y = 12 User: x + y = k x - y = k The solution to the system shown is _____. (0, k) (2, 2) (k, 0) Weegy: ...
6/29/2016 10:10:18 AM| 3 Answers
It's 3:34, what time was it 50 mins ago?
6/29/2016 2:36:26 AM| 2 Answers
What ending should this word have? deplor- able ible
Weegy: This word should end in -able. DEPLORABLE. User: What ending should this word have? predict- able ible
6/29/2016 6:35:29 AM| 2 Answers
The small, raised features on the surface of the tongue are ...
Weegy: The small, raised features on the surface of the tongue are called: papillae. User: Which of these is NOT a ...
6/29/2016 1:44:48 AM| 1 Answers
Human activity can affect the population size of another species ...
Weegy: ALL OF THE ABOVE. Human activity can affect the population size of another species through: ...
6/29/2016 2:20:39 AM| 1 Answers
Who was the director of the Manhattan Project, which created the ...
Weegy: A. The Marshall Plan provided them with the opportunity to emigrate to the United States and avoid trial. ...
6/29/2016 2:45:05 AM| 1 Answers
Weegy Stuff
S
P
L
Points 1064 [Total 1725] Ratings 2 Comments 1044 Invitations 0 Offline
S
Points 379 [Total 740] Ratings 2 Comments 359 Invitations 0 Offline
S
Points 172 [Total 247] Ratings 1 Comments 162 Invitations 0 Offline
S
L
P
P
P
Points 161 [Total 3704] Ratings 0 Comments 161 Invitations 0 Offline
S
Points 137 [Total 418] Ratings 0 Comments 137 Invitations 0 Offline
S
Points 127 [Total 179] Ratings 0 Comments 127 Invitations 0 Offline
S
P
1
Points 107 [Total 852] Ratings 3 Comments 57 Invitations 2 Offline
S
L
Points 87 [Total 4207] Ratings 0 Comments 87 Invitations 0 Offline
S
Points 40 [Total 50] Ratings 1 Comments 30 Invitations 0 Offline
S
Points 32 [Total 139] Ratings 0 Comments 32 Invitations 0 Offline
* Excludes moderators and previous
winners (Include)
Home | Contact | Blog | About | Terms | Privacy | © Purple Inc.