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But I might not be able to practice many questions within 3 months. What should I do?
If I write something how will I be able to know whether it is correct or incorrect by just looking at the model answer without anyone checking it and giving feedback
3. Specifically he has asked the engagement quality reviewer who was until last year the audit engagement partner on hurling co assist the company in this recruitment
But why this has not been identified as a self review threat in the answer
The second statement looks the same as the first statement so if the second statement is a deficiency then why the first statement is not a deficiency
The lack of segregation of duties has been identified as a separate deficiency from the second statement
But I can not find in the answer that it is written that if the sales department does not receive a copy, they will not be able to chase unfulfilled orders (leading to a loss of revenue).
1. Pear’s retail customers undergo credit checks prior to being accepted and credit limits are set accordingly by a sales manager.
2. Sales staff are responsible for assessing new customers’ credit worthiness and proposing a credit limit which is then authorised by the sales director.
The first statement and the second statement look the same but why the first one is a direct control whereas the second one is a deficiency
How will third party inventories find their way into the inventory valuation
I attempted the questions and read the resource but still find it difficult to check my own answers. What should I do
1. The finance director is keen to announce the company’s financial results to the stock market earlier than last year and in order to facilitate this he has asked if the audit could be completed in a shorter timescale.
Should this statement be included as audit risk when answering part b of this question and as ethical threat when answering part c of this question. Or should this statement be used only once either as audit risk or as ethical threat
3. Specifically he has asked the engagement quality reviewer who was until last year the audit engagement partner on hurling co assist the company in this recruitment
Why does this does not lead to a self review threat if the engagement quality reviewer and the audit engagement partner are the same person
how does self interest and self review threat arise in this situation
If the partner is no longer engagement quality reviewer, then he would not be reviewing the audit so the self review threat does not arise.
Also a safeguard would be to rotate the partner so that he does not review the work related to this audit rather than having to resign. Is this correct
horti and co is planning its external audit of tree co. Yesterday, the audit engagement partner charlie thrower discovered that a significant fee for information security services which were provided to tree co by horti and co is overdue. Charlie hopes to be able to resolve the dispute amicably and has confirmed that he will discuss the matter with the finance director, percy marsh, at the weekend, as they are both attending a party to celebrate the engagement of charlie’s daughter and percy’s son
Which of the following statements correctly explains the possible threats to horti and co’s independence and recommends an appropriate safeguard in relation to the audit of tree co?
An intimidation threat exists due to the overdue fee and tree co should be advised that all fees must be paid prior to the auditor’s report being signed
A self review threat exists due to the nature of the non audit work which has been performed and an engagement quality review should be carried out
Why the above two statements are not correct
plant co is a large private company with a financial year to 30 june and has been an audit client of horti and co for several areas. Alan marshlow, a partner of horti and co has acted as the engagement quality review on the last two audits to the year ended 31 december 20X4. At a recent meeting, he advised that he can no longer be Eqr on the engagement as he is considering accepting appointment as a non executive director and will sit on the audit committee of plant co.
Why would this not lead to a familiarity threat
If liabilities would be understated then why in the answer it is written that liabilities would be misstated
But it is not mentioned in the explanation of this audit risk that inventory records would be incomplete which will lead to understatement. Instead it is mentioned that inventory counts are incomplete
If this phrase will not be credited then why is it given as an explanation of this control deficiency in the answer
But why is it not mentioned in the answer that the manager should review the standard costs annually.
If unable to think of a better point then should the same point be repeated
The receipt of 0.7m is not virtually certain. if 0.7m is recognised as a current asset, then current assets will be overstated and profit overstated
So the above explanation for this audit risk is not correct
How could inventory be understated
If the perpetual inventory counts are not all completed such that some inventory lines are not counted in the year then how could inventory be understated
So should I write the explanation of control deficiencies such as the loss of employee goodwill only once in the exam
The receipt of 0.7m is not virtually certain. if 0.7m is recognised as a current asset, then current assets will be overstated and profit overstated
Is the above explanation for this audit risk also correct
Which explanation is better this one or the one given in the answer
