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June 2014: Saxophone co. question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › June 2014: Saxophone co. question

  • This topic has 1 reply, 2 voices, and was last updated 8 months ago by Kim Smith.
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  • August 14, 2024 at 9:48 am #709650
    menpagalhoon
    Participant
    • Topics: 71
    • Replies: 35
    • ☆☆

    Here is a link to the question: https://www.acowtancy.com/exams/acca-aa/paper-question/jun-2014-genuine-q4a

    While describing the disadvantages of Saxophone co. outsourcing its internal audit service to Cello co., the standard answer writes:

    Cello will allocate available staff members to work on the internal audit assignment; this may mean that each visit the staff members are different and hence they may not fully understand the systems of Saxophone. This will decrease the quality of the services provided and increase the time spent by Saxophone’s employees in explaining the system to the auditor.

    My query is: How will we know that Cello co. will allocate different staff member to the internal audit service of Saxophone co. each time since anything like this isn’t mentioned in the scenario??

    Thank you!!!

    August 16, 2024 at 2:46 pm #709893
    Kim Smith
    Keymaster
    • Topics: 132
    • Replies: 8265
    • ☆☆☆☆☆

    It’s no different to how an audit firm allocates staff to different services (external audit, taxation, internal audit, corporate financial….) to different clients. An audit firm will allocate staff to meet their training and development needs while delivering services to all its clients.

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