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
18,064,623 questions answered
Popular Conversations
How would you rewrite the equation 2x + 4y + 2 = 3y + 5 in general ...
Weegy: FOIL (First Outside Inside Last) = 2x(2x) + 2x(-3y) + (-3y)(2x) + (-3y)(-3y) = 4x^2 + (-6xy) + (-6xy) + ...
10/30/2014 6:28:25 PM| 5 Answers
Solve the following equation. x + 6 = x + x 2 6 14 72 User: ...
Weegy: I'm sorry, do you have a question I can help you with today? User: Solve for A. BA + C = D A = D - B - C A ...
10/30/2014 9:06:00 AM| 3 Answers
What is the slope of the line that has the equation 4x + 2y = 12?
Weegy: The slope of the line that has the equation 4x + 2y = 12 is -2. User: What is the y-intercept of the line ...
10/30/2014 6:21:18 PM| 3 Answers
Prior to the Seventeenth Amendment, who chose the members of the US ...
Weegy: Prior to the Seventeenth Amendment, State legislatures chose the members of the US Senate. User: Prior to ...
10/30/2014 7:05:25 AM| 2 Answers
______________ means to enclose something tightly, such as is done ...
Weegy: Embedding means to enclose something tightly, such as is done with stones or tiles, and a filler, when creating ...
10/30/2014 7:30:45 AM| 2 Answers
In a plane, if two lines are perpendicular to the same line, then ...
Weegy: Two lines parallel to the same plane are parallel to each other. TRUE. User: Congruent triangles are any two ...
10/30/2014 8:12:29 AM| 2 Answers
Weegy Stuff
S
L
1
1
1
1
L
1
L
Points 3285 [Total 15660]| Ratings 0| Comments 3285| Invitations 0|Offline
S
L
1
L
P
C
1
P
C
1
L
Points 2185 [Total 11666]| Ratings 5| Comments 2135| Invitations 0|Offline
S
1
L
1
L
P
P
L
Points 1114 [Total 13343]| Ratings 1| Comments 1104| Invitations 0|Offline
S
L
Points 888 [Total 2287]| Ratings 0| Comments 888| Invitations 0|Offline
S
Points 708 [Total 709]| Ratings 7| Comments 638| Invitations 0|Offline
S
1
L
L
Points 567 [Total 6361]| Ratings 3| Comments 537| Invitations 0|Offline
S
Points 501 [Total 501]| Ratings 1| Comments 491| Invitations 0|Offline
S
Points 483 [Total 483]| Ratings 0| Comments 453| Invitations 3|Offline
S
L
Points 79 [Total 1296]| Ratings 1| Comments 69| Invitations 0|Online
S
1
Points 70 [Total 688]| Ratings 0| Comments 70| Invitations 0|Offline
Home | Contact | Blog | About | Terms | Privacy | Social | ©2014 Purple Inc.