[samsun]

Sir likewise there was audit risk that The directors have reviewed the asset lives and depreciation rates of plant and machinery, resulting in the depreciation charge reducing.

For its response examiner mentioned that:

Discuss with the directors the rationale for any extensions of
asset lives and reduction of depreciation rates.

The revised useful life of a sample of assets should be compared
to how often these assets are replaced, as this provides
evidence of the useful life of assets.

Please confirm me 1 thing discuss with directors the rationale….. is a 1 full response na?
And Revised useful life of a sample…. is another full response na?

These both are 2 separate and different responses na? And I should be writing any 1 from these 2 na?

[samsun]

There is another threat that Client states that fee for taxation services should be based on a percentage of tax saved.

For its explanation what can we write? Will it be appropriate to write that “This constitutes self-interest threat as it will be difficult for the audit team to remain independent as audit team will want to save as much tax as possible in order to charge high tax fees”?

[samsun]

And for its test of control auditor will need to ask for a sample of credit limits form to see whether they have reviewed by sales director or not? Right?

[samsun]

Thankyou

[samsun]

Sir the control which we have suggested that “A sample of system generated calculations should be recalculated by payroll supervisor and these calculations should be signed by finance director as approved before payment of salaries”

In past paper answer the control suggested was that “A senior member of the payroll team should recalculate the gross to net pay workings for a sample of employees and compare their results to the output
from the payroll system. These calculations should be signed as approved before payments are made.”

So if in exam the same deficiency comes again and if I do not wrote the past paper answer and instead write the answer which we have suggested so it means the same thing na? And we will get the full 1 mark for the control which we have suggested na?

[samsun]

Sir can you please fill the following blanks for me

Control:
A sample of system generated calculations should be recalculated by ______________ and these calculations should be signed by ___________ as approved before payment of salaries ?

TOC:
Ask for a sample of system generated calculations to see whether they have been by______________________ or not?

[samsun]

So for its TOC I shall just write that “Perform test data to ensure that discounts have been correctly applied to those customers who are authorized to receive them according to the standing data that is held” Right?

[samsun]

signed*

[samsun]

So can we write that system generated calculations should be recalculated by a senior responsible official and these calculations should be signed by him as approved before payment of salaries ?

And for its test of control can we write that ask for a sample of system generated calculations to see whether they have been by senior responsible official or not?

[samsun]

OR more appropriate that “Ask any clerk to enter a dummy manual entry for discount , system should reject the entry”?

[samsun]

So by test data, can I elaborate and write that “enter a dummy manual entry for discount , system should reject the entry”?

[samsun]

Can you please tel me an appropriate test of control for the control which I have suggested?

[samsun]

So for explanation of deficiency would it be correct to say just that clerk could forget to manually enter the discount or enter an incorrect level of discount for a customer, leading to the sales invoice being overstated and
a loss of customer goodwill?

And its control that The invoicing system should be amended to prevent sales clerks from manually entering sales discounts
on invoices?

[Author]

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