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Dear tutors,
Can you give me an audit responses and explain for 2 audit risks bellow:
1/Not provided for provision / contingent of a law sue
2/not provided for slow moving goodsAuditors need to considereal if the provision is needed or if a note is enough or perhaps no mention at all. If the provision is needed they have to have evidence as to amount. Information fron company’s lawyers and legal experts.
Goods should be valued at lower of cost and nrv. Determing nrv can be difficult eg what are they currently selling for etc.
Another audit risk mr Ken, pleaae help me out
“Admin exp is significantly fall
Admin exp tend to be fixed and would be unlikely to fluctuate significantly with changes in sale volumes”What does this sentence mean?
Admin expenses such as office rent, salaries of admin personnel, hire of photocopier etc are mainly fixed costs and not related to production or sales.
If admin expenses have fallen then auditors should be a little suspicious.
Ok, it might be understated to for some reason whether due to fraud or error, and those changes in sales or productions do not impact to admin exp
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