[hilmanazmir]

My Takeaways from The Q1
Business Risk
– The risks are more on the first few para, thus can put issues on the lack of control of too many branches, the health and safety requirements can affect operating license, two internal auditors – 1) understaffed for the no. of branch 2) report to FD thus indicates no considerations for other aspect of biz (operations, quality of service), NED from competitor can lead to disclosure of trade secrets etc (more out of the box thinking)

RoMM
-Too many marks allocated, so aside from the Accounting Standards (revenue, government grants), can touch on the Management AC provided (note that it was 20 branches, when case said 30,so incomplete amalgamation) , the staff cost, marketing cost, have all been stagnant contradicting to the case, thus ultimately can touch on the reliability on using the management accounts itself, new management system 1) transfer of data 2) learning curve thus more prone to misstatements, also FD has no one to check upon as IA report to him. In summary, more from the weakness from internal controls and the botched management account (should focus more on other aspects aside from IFRS issues as too much marks allocated – arnd 12 RoMM needed)

MTC
– consider the fact that they have already provided payroll system so this affects the acceptance of audit engagement (prohibited)
– any ethical threats , familiarity, self-review

Could Fraud Be Detected
– consider the objectives on audit? more to checking errors in FS and not detecting fraud
– since figures are given, maybe touch on whether during AP, we would have gotten something out of any trend analysis
-sales figure increased, therefore not much attention would be needed let alone to analyse the Shop and the Other One in full detail
-as for limited review, the checking would even be less extensive thus much less effective
– conclude that it wont detect fraud, then touch on what the company needed was a forensic investigation, and even that would arise from a suspicion from the management

(do comment if you want more analysis tq)

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