150 81 0
  • Loading ...
1/150 trang
Tải xuống

Thông tin tài liệu

Ngày đăng: 26/03/2018, 14:37

1|Page LEVERAGE ASSOCIATE, LAGOS ADVANCED AUDIT AND ASSURANCE PAPER P7 NOTE ON ACCA PAPER P7 TESLEEM ADELODUN (ACCA) +2348039399907, 2016/17 FOR MORE INFO FOLLOW ME ON TWITTER…@BABATESHOCKI Tesleem Adelodun (ACCA) +2348039399907 2|Page TABLE OF CONTENT CONSIDERATION OF LAWS AND REGULATIONS IN AUDIT MONEY LAUNDRY PROFESSIONAL CODES OF ETHICS 11 FRAUD AND ERROR 20 PROFESSIONAL LIABILITY 21 QUALITY CONTROL 28 ADVERTISEMENT OF AUDIT SERVICES 29 TENDERING 29 ETHICS OF APPOINTMENT 30 AUDIT OF FINANCIAL STATEMENTS 38 REVISION OF ACCOUNTING STANDARDS 57 GROUP AUDIT ISSUES 107 AUDIT REPORT 120 OTHER ASSIGNMENTS 130 FORENSIC AUDITING 138 Tesleem Adelodun (ACCA) +2348039399907 3|Page CONSIDERATION OF LAWS AND REGULATIONS IN AN AUDIT OF FINANCIAL STATEMENTS ISA 250 Non compliance Non-compliance refers to acts of omission or commission by the entity, either intentional or unintentional which are contrary to the prevailing laws or regulations Companies are subject to many laws and regulations for example:  Company law  Employment law  Income tax law  Labour law  Environmental Protection law etc Responsibilities of Management and Auditors regarding laws and regulation Management Management is responsible for the prevention, detection and correction of noncompliance with laws and regulations The following policies and procedures may be implemented by the management in order to prevent and detect non-compliance with laws and regulations: Maintain a register of significant laws with which the entity has to comply Engage legal advisors to assist in monitoring legal requirement Institute and operate appropriate system of internal controls Develop, publicize and follow a code of conduct Auditor As with fraud, the auditors are not, and cannot be held responsible for preventing noncompliance but they should aim to be aware of those that could materially affect the Financial Statements There is unavoidable risk that some material misstatements in the financial statements go undetected even though the audit is properly planned and performed Tesleem Adelodun (ACCA) +2348039399907 4|Page Audit Procedures to identify non-compliance with laws and regulations The auditor should obtain general understanding of the laws and regulations affecting the entity, which includes procedures such as:  Use the auditor’s existing understanding of the entity’s industry, regulatory and other external factors  Enquire of management as to the laws and regulations that may be expected to have a material effect on the operations of the entity  Enquire of management concerning the entity’s policies and procedures regarding compliance with laws and regulations  Enquire of management the policies or procedures adopted for identifying, evaluating and accounting for litigation claims The auditor should obtain sufficient appropriate audit evidence of compliance with other laws and regulations such as entity’s license to operate (non-compliance may doubt going concern) that may have a fundamental effect on operations of the entity The following procedures may indicate the instances of non-compliance such as:  Reading minutes  Enquiring from the company’s and external legal advisors  Performing substantive tests of details of classes of transactions, accounts balances and disclosures The auditor should obtain written representation from management and those charge with governance that they have informed auditor about all known and suspected non-compliance Tesleem Adelodun (ACCA) +2348039399907 5|Page Audit procedures when non-compliance is identified: In such a case the auditor shall obtain: An understanding of the nature of the act and the circumstances in which it has occurred Further information to evaluate the possible effect on the financial statements When evaluating the possible effect on the financial statements the auditor should consider the following:  Potential financial consequence such as fines and penalties  Whether potential financial consequence require disclosure  Impact on the auditor’s report When non-compliance is identified the auditor should:  Reassess the risk  Reassess the validity of written representation  Take independent legal advice In exceptional cases the auditor may consider whether withdrawal from the engagement is necessary Reporting of identified or suspected non-compliance  Communicate to those charged with governance, unless they themselves are involved  If management and those charged with governance are involved consider reporting to next level of authority like audit committee  Where no higher authority exists, or if the auditor believes that the communication may not be acted upon or is unsure as to the person to whom to report, the auditor shall consider the need to obtain legal advice Tesleem Adelodun (ACCA) +2348039399907 6|Page Impact of non-compliance on the auditor’s report  When non-compliance is material and not adequately disclosed in the financial statement the auditor shall express qualified opinion or adverse opinion  When the auditors is precluded by the management and those charged with governance from obtaining sufficient appropriated audit evidence than the auditor should express a qualified opinion or disclaim an opinion on the basis of limitation of scope Reporting non-compliance to regulatory authority If the auditor is precluded by management or those charged with governance from obtaining sufficient appropriate audit evidence to evaluate whether non-compliance that may be material to the financial statements has, or is likely to have, occurred, the auditor shall express a qualified opinion or disclaim an opinion on the financial statements on the basis of a limitation on the scope Consideration of withdrawal from the Engagement The auditor may conclude that withdrawal from the engagement is necessary when the entity does not take the remedial action that the auditor considers necessary in the circumstances, even though the noncompliance is not material to the financial statements Non-compliance with regulation cast doubt on the integrity of the management MONEY LAUNDERING Money laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activity In order to be able to spend money openly, criminals will seek to ensure that there is no direct link between the proceeds of their crime and the actual illegal activities Tesleem Adelodun (ACCA) +2348039399907 7|Page Factors indicating money laundering:  Transactions routed through several jurisdiction  High level of secrecy over transactions  Excessive use of wire transfers  High value deposits or withdrawals not characteristics of the type of account  A pattern that after a deposit, the same amount is wired to another financial institution The three stages of the money laundering process  Placement;  Layering.; and  Integration Anti-money laundering procedures The firm must gather know your client information (KYC) to assist in spotting suspicious transactions This includes: Who the client is Who controls it The nature of the client The client’s sources of funds The client’s business and economic purposes In the UK, the basic requirements are for accountants to keep records of client’s identity and to report suspicions of money laundering to the Serious Organized Crime Agency (SOCA) Tesleem Adelodun (ACCA) +2348039399907 8|Page Elements of basic money laundering program Appoint Money Laundering Reporting Officer (MLRO) Train the individuals to ensure that they are aware of relevant legislation, know how to deal with potential money laundering, how to report suspicions to MLRO Establish internal procedures such as know your client and client acceptance procedures to prevent money laundering Verify the identity of new and existing clients and maintain evidence of identification Maintain records of identification, and any transactions undertaken for or with the client Report suspicions of money laundering to SOCA Note: Concealing and tipping off (MLRO or any individual discloses something that might prejudice any investigation) is itself a criminal offence The obligation to report money laundering act does not depend on the amount involved or the seriousness of the offence The need for ethical guidance on money laundering This is needed because there is a clear conflict between the following two situations: The accountants’ professional duty of confidentiality in relation to client’s business, and The duty to report suspicions of money laundering to the appropriate authorities as required by law Professional accountants are not in breach of their professional duty of confidentiality if they report in good faith their knowledge or suspicions of money laundering to the appropriate authority Disclosure without reasonable grounds would possibly lead to the accountants being sued for breach of confidence Tesleem Adelodun (ACCA) +2348039399907 9|Page The auditor is advised to always seek legal clarification as regards money laundry disclosure Question A) Comment on the need for ethical guidance for accountants on money laundering (4 marks) B) The Financial Action Task Force on Money Laundering (FATF) recommends preventative measures to be taken by independent legal professionals and accountants (including sole practitioners, partners and employed professionals within professional firms) Required: Describe FOUR measures that assist in preventing professional accountants from being used for money laundering purposes (8 marks) Answers Part A 1) In a jurisdiction where money laundry constitutes criminal offence, accountants need guidance on the correct interpretation of the laws relating to money laundry This is because accountants are not lawyers and may lack technical understanding of the money laundry laws 2) Further guidance is needed to explain the interaction between accountant’s responsibilities to report money laundering offences according to the law and auditor’s responsibility to report to those charged with governance 3) If he resigns from an engagement as a result of money laundry suspicion, auditor needs guidance is responding to the clearance letter regarding any necessary disclosures 4) Where there is conflict between the legal responsibility and professional responsibility as regards disclosure of information, accountants need guidance on which of the responsibilities overrides another Tesleem Adelodun (ACCA) +2348039399907 10 | P a g e Part B 1) Audit firm should appoint a compliance officer with suitable level of seniority and experience The compliance officer will be responsible for:  receiving and assessing money laundering reports from colleagues  making reports to the relevant agency 2) The audit firm should ensure there is adequate training of its staff regarding:  relevant money laundering legislation  ethical and professional guidance relating to the responsibilities of accountants regarding money laundry  how to report money laundry suspicions 3) Firms should Perform customer due diligence before accepting an engagement Firms should verify the following:  the ownership structure of the client  the identities of the major shareholders  the identities of the directors  the nature of transactions of the client 4) The firm should maintain adequate records of the client including details of its transactions Tesleem Adelodun (ACCA) +2348039399907 136 | P a g e Acceptance of PFI engagement Before accepting an engagement to examine prospective financial information, the auditor would consider, among other things:  The nature of the assumptions, that is, whether they are best –estimate or hypothetical assumptions  The period covered by the information  The intended use of the PFI  Whether the information will be for general or limited distribution “General use” means that the statements will be used by persons not negotiating directly with the responsible party “Limited use” refers to situations where the statements are to be used by the responsible party alone or by the responsible party and those parties negotiating directly with the responsible party  Competence and experience of the preparer  Level of assurance to be provided Possible procedures for cash flow forecast The following procedures, among others may be applicable:  Make enquiry of the preparer of the forecast and verify that they are competent  Perform analytical procedures on historical information to confirm reasonableness of the forecast  Obtain direct confirmation from major trading partners of the client that they will continue to deal with the client  Agree salary payment to payroll  Discuss sources of cash inflow in the forecast and evaluate the validity of the reasons obtained  Obtain a written confirmation from loan provider if any  Obtain and review the financial statement of loan provider to assess whether it has sufficient fund available Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 136 137 | P a g e  Should there be any claimed subsidy, inspect the application made for the subsidy to confirm the amount of the subsidy  In addition to the above, inspect correspondence with the subsidy awarding body to assess the likelihood of getting the subsidy  Cast the cash flow forecast  Agree the opening cash position to cash book and bank statement Procedures on forecast made in support of loan application  Review the forecast and assess if the assumptions used reflects business reality  Obtain written representation from management confirming that the assumptions in the forecast are achievable  Assess the sufficiency of the loan requested to cover the intended expenditure  Discuss any other source of finance being considered by management and assess the likelihood Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 137 138 | P a g e Forensic Auditing Forensic Accounting This refers to use of accounting, auditing and investigative skills to conduct an examination into company’s financial affairs Forensic accounting refers to the whole process of investigating a financial matter, including potentially acting as an expert witness if the fraud comes to trial Forensic Accounting provides an accounting analysis that is suitable to the court which will form the basis for discussion, debate and ultimately dispute resolution Forensic Accounting includes:  Reconstructing records accidentally or intentionally destroyed  Vouching and tracing transactions and validation of supporting documentation  Analyzing financial results  Determining the completeness and accuracy of financial reports Forensic Audit Forensic auditing refers to the specific procedures carried out in order to produce evidence Audit techniques are used to identify and to gather evidence to prove Forensic Investigation The utilization of specialized investigative skills in carrying out an inquiry conducted in such a manner that the outcome will have application to a court of law Matters to consider in forensic assignment  Whether the firm has staff with sufficient experience  Scope of work involved  Whether any independence issue arise  Reliance to be placed on the report Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 138 139 | P a g e Procedures to carry out before accepting appointment  Review staff availability and timings  Discuss scope with client’s management  Discuss fees and deadlines  Draft an engagement letter Forensic audit and its application to fraud investigation The objectives of the investigation will include:  Identifying the type of fraud that has been operating, how long it has been operating for, and how the fraud has been concealed  Identifying the fraudster(s) involved  Quantifying the financial loss suffered by the client  Gathering evidence to be used in court proceedings  Providing advice to prevent the reoccurrence of the fraud Steps involved in forensic investigation (fraud case)  establish the type of fraud that has taken place  determine for how long the fraud has been operating  determine how the fraud was conceal  collect evidence  produce report  show up in court proceedings if required Forensic investigation being requested by an audit client: ethical consideration Unless robust safeguards are put in place, the firm should not provide audit and forensic investigation services to the same client A perceived threat to objectivity that may occur includes: Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 139 140 | P a g e  Advocacy threats The audit firm may be promoting interest of the client in court as they are concerned about losing their audit fees  Self-review The self-review threat arises because the investigation is likely to involve the estimation of an amount If the amount as quantified by the auditor is material to the financial statement, the auditor will be auditing his own work Application of ethical principles to a fraud investigation IFAC’s Code of Ethics for Professional Accountants applies to all ACCA members involved in professional assignments, including forensic investigations There are specific considerations in the application of each of the principles in providing such a service Integrity The forensic investigator is likely to deal frequently with individuals who lack integrity, are dishonest, and attempt to conceal the true facts from the investigator It is imperative that the investigator recognises this, and acts with impeccable integrity throughout the whole investigation Objectivity As in an audit engagement, the investigator’s objectivity must be beyond question The report that is the outcome of the forensic investigation must be perceived as independent, as it forms part of the legal evidence presented at court The investigator must adhere to the concept that the overriding objective of court proceedings is to deal with cases fairly and justly Any real or perceived threats to objectivity could undermine the credibility of the evidence provided by the investigator Professional competence and due care Forensic investigations will involve very specialist skills, which accountants are unlikely to possess without extensive training It is therefore essential that forensic work is only ever undertaken by highly skilled individuals, under the direction and supervision of an experienced fraud investigator Any doubt over the competence of the investigation team could severely undermine the credibility of the evidence presented at court Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 140 141 | P a g e Confidentiality Normally accountants should not disclose information without the explicit consent of their client However, during legal proceedings arising from a fraud investigation, the court will require the investigator to reveal information discovered during the investigation There is an overriding requirement for the investigator to disclose all of the information deemed necessary by the court Outside of the court, the investigator must ensure faultless confidentiality, especially because much of the information they have access to will be highly sensitive Professional behaviour Fraud investigations can become a matter of public interest, and much media attention is often focused on the work of the forensic investigator A highly professional attitude must be displayed at all times, in order to avoid damage to the reputation of the firm, and of the profession Any lapse in professional behaviour could also undermine the integrity of the forensic evidence, and of the credibility of the investigator, especially when acting in the capacity of expert witness During legal proceedings, the forensic investigator may be involved in discussions with both sides in the court case, and here it is essential that a courteous and considerate attitude is presented to all parties Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 141 142 | P a g e Question FLASHMARK Flashmark is an audit client of your firm and manufactures household furniture It has a year end of 30 June On 13 November 2008, a fire destroyed the company’s factory complex, which included the area used for storing raw materials The fire was caused by an electrical fault The factory has now been rebuilt and the company recommenced trading in May 2009 The finance director of Flashmark produces monthly management accounts; in these, inventory and cost of sales are estimated, based on sales figures less assumed margins At 30 September and 31 March, the company conducts full physical inventory counts for its own purposes in addition to its year-end count The results of these counts are compared with the management accounts for September and March and adjustments are made to reflect the physical quantities and their appropriate values The finance director has contacted your firm to provide a certificate in support of his claim for losses of profits and loss of inventories arising as a result of the fire Required: (a) Identify and comment on the issues raised as they affect the extent and scope of this assignment (b) (8 marks) State the information you would seek and the procedures you would perform in order to reach an opinion on the company’s claim for losses of profits and loss of inventory (7 marks) (c) Outline the form and content of your report accompanying the claim Prepared by Tesleem Adelodun (ACCA),+2348039399907 (5 marks) Page 142 143 | P a g e Answers (a) Issues raised Prospective financial information The financial information on which a certificate is required is for a period (not yet expired) in respect of which the annual audit has yet to be undertaken The losses of profits will essentially be forecasts of the finance director’s best expectation of the most likely results of months trading after the fire Assumptions The finance director will have had to make assumptions which reflect his judgment as to the conditions prevailing during the period of non-trading activity Some assumptions will be highly subjective Scope The investigation will encompass the raw material inventory valuation, loss of profits calculation and statement of assumptions Management’s responsibilities Management’s responsibility for the assumptions and other matters of judgement and opinion should be confirmed in a letter of engagement Report required Although the finance director has requested a “certificate”, it will not be appropriate for his claims to be “guaranteed” in any way The form and content of the report(s) required must be established before the assignment can be accepted It would be equally inappropriate for opinions in “true and fair” terms to be required Timescale As for all professional work, the assignment should be carried out with a proper regard for the technical and professional standards expected It is unlikely that the level of skill and care necessary for forming opinions in these areas can be exercised within a restricted timescale Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 143 144 | P a g e Access to information There should be unrestricted access to all information and explanations necessary to form an opinion on the company’s claims It may be necessary to discuss sensitive issues, for example, relating to the cause of the fire and any police investigation Prior year audit Some relevant information is probably included in the prior year audit working paper file as the fire is likely to have occurred before the auditor’s report was signed (or even before the field work was completed) Some verification work may have already been undertaken, for example, for disclosure of the financial effect of this non-adjusting event after the reporting period Current year audit It may be expeditious to perform certain audit work while undertaking this assignment (e.g to avoid having to repeat or extend tests at a later date) In particular, the insurance claim is likely to constitute a receivable balance at 30 June 2009 Engagement letter All relevant matters concerning responsibilities, scope of work and reporting requirements should be set out in a letter of engagement which the finance director should acknowledge in writing before work on the assignment commences (b) Information  Insurance cover, terms and conditions including sums insured and deductibles Specifically:  whether raw material inventory is insured for replacement cost or a written down value;  how gross profit is defined (e.g the amount by which turnover and closing inventory exceed opening inventory and specified operational expenses)  Latest amounts declared for consequential loss cover (e.g based on last year’s audited financial statements) Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 144 145 | P a g e  Results of 30 September 2008 (and earlier) inventory counts The quality as well as the quantity of slow-moving items should have been noted (at least for last year- end)  Monthly profits for the months of disruption, the previous months and the corresponding amounts for the previous year  Industry statistics, for example, % increase/decrease of monthly trading compared with prior year Procedures  Inspect the insurance policy and obtain details of any claims already submitted, for example, in respect of damage to buildings (which could include cleaning costs which might otherwise be claimed as consequential loss)  Compare inventory quantities claimed to have been lost against September inventory count quantities Substantiate significant increases, for example, to purchase invoices dated in the period October to mid-November  Compare management’s assumptions and policies with those normally adopted for the preparation of management accounts and annual financial statements and investigate any inconsistency  Agree the client’s valuation of all significant raw material inventories to historic or current purchase invoice data (as appropriate)  Agree the basis of the client’s loss of profits calculation to that specified in the insurance policy  Agree the make-up of costs deducted from lost sales and ensure they are allowable under the terms of the insurance policy (c) Form and content  Purpose of report and for whom it is prepared (e.g to the directors of Flashmark)  The financial information investigated, i.e the valuation of lost inventory and loss of profits Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 145 146 | P a g e  The date of the event (13 November) and the nature of the disruption, i.e fire followed by periods of closure and rebuilding  Scope of investigation undertaken, for example, in accordance with the terms of the letter of engagement and ISA 920 Engagements to Perform Agreed-Upon Procedures Regarding Financial Information  Principal assumptions and judgements relating to the valuations concerning, for example:  the net realisable value or replacement cost of inventory:  the basis of verifying the quality of inventory destroyed  Summary of results and findings  Opinions e.g “assumptions not contradicted”  Qualification, for example, “except for” all necessary information and explanations having been received from the client Question PETER LAWRENCE A new client of your practice, Peter Lawrence, has recently been made redundant He is considering setting up a residential home for old people as he is aware of an increasing need for this service with the ageing population He has seen a large house, which he plans to convert into an old people’s home; each resident will have a bedroom, there will be a communal sittingroom and all meals will be provided in a dining-room No long-term nursing care will be provided The large house is in a poor state of repair, and will require considerable structural alterations, and repairs to make it suitable for an old people’s home, and in particular new furniture and fittings, decoration of the whole house, and specialised equipment Mr Lawrence and his wife propose to work full-time in the business, which he expects to be available for residents six months after the purchase of the house Mr Lawrence has already obtained some estimates of the conversion costs, and information on the income and expected running costs of the home Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 146 147 | P a g e Mr Lawrence has received about $30,000 from his redundancy, and expects to receive about $30,000 from the sale of his house (after repaying his mortgage) The owners of the house he proposes to buy are asking $50,000 for it, and Mr Lawrence expects to spend $50,000 on conversion (i.e building work, furnishing, decorations and equipment) Mr Lawrence has prepared a draft capital expenditure forecast, a profit forecast and a cashflow forecast which he has asked you to check before he submits them to the bank, in order to obtain finance for the old people’s home Required: (a) Identify and comment on the issues you would consider before undertaking such work (5 marks) (b) Describe the factors you should consider in verifying each of the three forecasts (15 marks) Answers (a) Considerations before undertaking work  Before accepting such an engagement the accountant must ensure that he has sufficient time, skilled staff and experience to perform the work  If he is reasonably confident of the viability and stability of the proposed business and foresees no limitations imposed on his work by management then he can accept the engagement  An engagement letter should be issued to confirm the nature, responsibilities and scope of the work The letter should emphasise that management are responsible for the forecasts  In planning his work the accountant needs to obtain a good understanding of the residential home market Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 147 148 | P a g e (b) Factors to consider in verifying forecasts (i) Capital expenditure forecast The capital expenditure forecast will be split into monthly periods The accountant would carry out the following checks to establish that the forecast is reasonable  House purchase – Inspection of correspondence between estate agent, solicitors and Peter Lawrence Consider estimates of solicitor’s fees, survey fees and stamp duty on the purchase The latter cost is unavoidable and maybe a significant part of the cost of purchase  Building and repairs – Review of the estimate and comparison to any architect’s specifications, for reasonableness It would be prudent to inspect the house and examine those areas which are going to be subject to major renovations and repairs  Estimates for fixtures, furnishings and equipment – consider the reasonableness of estimates in the light of any Health Authority guidelines  Agree capital expenditure to estimates and price catalogues for specialist equipment, kitchen appliances and decoration  The forecast should also include specialised plumbing for kitchens, bedrooms and bathrooms which would be required for the type of clientele in the home  The accountant would enquire whether Mr Lawrence intends to purchase any of these items on Hire Purchase; alternatively whether any of the items are to be leased which would have a bearing on the cash flow forecast (ii) Profit forecast The profit forecast will include income and expenditure The accountant will consider the following:  Income – The majority of income will arise from room lettings It will be unlikely that Mr Lawrence will have 100% occupancy when the home becomes operational Therefore it will be necessary to establish that realistic estimates of income have been obtained Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 148 149 | P a g e There should obviously be no income in the period when the home is being renovated The reasonableness of the rate per room should be checked with any Health Authority guidelines and brochures of homes of a similar type  Staff costs – The major item of expenditure will be staff costs The accountant should enquire whether the ratio of residents to nursing staff is reasonable and complies with what the Health Authority regard as desirable The rates of pay for the staff should be verified by reference to local newspapers, staff agencies and any other homes of a similar type  Rent and water rates – can be verified by reference to local authority data or from surveyors correspondence  Electricity and gas – this will be subjective and based upon the accountant’s experience with similar types of business  Food – an estimate of the cost of each day's meals per head should be obtained This should be reasonable in comparison with similar organisations  Telephone – there will be an initial charge for installing the telephone and a reasonable estimate of expenditure should be made  Insurance – this will include public liability insurance, employer’s liability insurance and fire insurance Correspondence with Mr Lawrence’s underwriter should reveal estimates for these  Interest – the interest charge should be based upon Mr Lawrence’s capital requirements at the rate applicable to overdrafts of unincorporated businesses  Depreciation, advertising etc – verify by reference to the outlays on plant and equipment, and advertising rates from the local press (iii) Cash flow forecast  Verifying the capital expenditure line in the outgoings part of the forecast with the capital expenditure forecast  Verifying the pattern of cash inflows with the profit and loss account income section Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 149 150 | P a g e  Verifying the payment of overheads, telephone, electricity and gas, with the profit and loss account and establishing that the total paid in the year is broadly equivalent to the annual charge plus or minus a year-end accrual  Verifying that rates are prepaid on the due dates and that the cash forecast makes provision for taxation  Checking that the computations on the cash flow forecast are consistent with the profit forecast Prepared by Tesleem Adelodun (ACCA),+2348039399907 Page 150 ... P a g e  Use of disclaimer in the audit report  Performing the audit according to international standards Auditor’s liability (Non audit assignment) The auditor will only be liable to the following... self-review threat and could make the auditor lose its objectivity Though, it is not prohibited for audit firm to carry out internal audit service for audit clients, but the auditor must ensure... ensure quality of audit work is maintained and to ensure the auditor complies with his duty of professional competence and behavior Lack of quality audit work will generally bring the audit profession
- Xem thêm -


Gợi ý tài liệu liên quan cho bạn

Nhận lời giải ngay chưa đến 10 phút Đăng bài tập ngay