Deficiencies – NBC Institute

PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector

Identifies two categories of persons exempted from the contributory pension scheme and discusses three deficiencies of the scheme.

Question

In accordance with Section 2(1-2) of the Pension Act 2014, both the public and private sectors’ pension schemes are now contributory. The employers and employees are expected to contribute a minimum of 18% in aggregate towards the retirement of the employees. The rate is subject to review as may be agreed between the employer and employees.

Required:

Identify TWO categories of persons exempted from the scheme.
Discuss THREE deficiencies of the scheme.

Answer

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Tags: Deficiencies, Exemptions, Pension Schemes, Public Sector, Retirement Benefits
Level: Level 2

Topic: Pension Accounting in the Public Sector
Series: NOV 2019

AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment

States the auditor's responsibilities when significant deficiencies in internal control are identified during an audit.

Question

A significant deficiency in internal control is one which merits the attention of those charged with governance.

Required:
State THREE (3) requirements of an Auditor when there are deficiencies in internal control of a client.

Answer

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Tags: Auditor's responsibility, Corporate Governance, Deficiencies, Internal Control, ISA
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: DEC 2022

AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

This question addresses identifying deficiencies in an inventory count, implications, and recommendations.

Question

Your firm is the external auditor of The Ceramicz Company, and you recently attended the year-end inventory count at the company’s warehouse. The company manufactures high-quality tableware (plates, cups, and saucers, etc.) and maintains an integrated computerised system that shows the inventory held at any point in time.

At the year-end inventory count, reports showing the various categories of inventories (but not the quantities) are printed off the system, and the quantities of inventories actually counted are inserted manually by the counters. Later, the quantities are compared with those per the computer system.

The count instructions were received by both you and the counters the day before the count was due to take place. The instructions consisted of the following five points:

Counters must arrive at 8 am on the morning of the count.
They will work in teams of two people.
Each team will be assigned a specific area of the warehouse to count. They will receive inventory sheets listing the products to be found in their area.
The inventory sheets are pre-numbered.
Once the counters have finished the inventory count, the inventory sheets must be handed to the warehouse manager.
Your notes from the attendance at the count include the following observations:

Many areas in which the count took place were untidy, and inventory was sometimes difficult to find because it was not in the allocated area. The same categories of inventories were sometimes found in several different areas, and some inventory was incorrectly labelled.
The count was conducted in a hurry in order to close the warehouse before a public holiday, and there were insufficient counters to conduct the count properly in the time available. The issue and receipt of inventory sheets (on which the quantities were recorded by counters) were not properly controlled. It was difficult to reconcile the inventory quantities recorded at the count to the computerised records, and some significant differences remain outstanding.
Although no finished goods were dispatched during the inventory count, a large delivery of raw materials was received into the warehouse.
Required:

a) For the inventory count conducted by the Ceramicz Company:
i. Identify and explain FOUR (4) deficiencies in the count.
ii. Explain the possible implication of each deficiency and
iii. Provide a recommendation to address each deficiency.
(12 marks)

Answer

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Tags: Audit Procedures, Deficiencies, Inventory Count, Recommendations
Level: Level 2

Topic: Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements
Series: NOV 2015

AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment

Identifies deficiencies in a company's wages system and provides recommendations to prevent misstatements in financial statements.

Question

Third Floor Ltd is a construction company with many contracts being executed concurrently. A large number of workers are on various construction sites. Third Floor Ltd has an internal audit department, and the team is currently reviewing cash wages systems within the company.

The following information is available concerning the wages systems:

Workers on each site are controlled by a foreman. The foreman has a record of all employee numbers and can issue temporary numbers for new employees.
Any overtime is calculated by the computerised wages system and added to the standard pay.
The two staff in the wages department make amendments to the computerised wages system in respect of employee leave, illness, as well as setting up and maintaining all employee records.
The computerised wages system calculates deductions from gross pay, such as employee taxes (PAYE), and other statutory deductions.
Finally, a list of net cash payments for each employee is produced. Cash is delivered to the wages office by secure courier. The two staff place cash into wages envelopes for each employee along with a handwritten note of gross pay, deductions, and net pay. The envelopes are given to the foreman for distribution to the individual employees.

Required:
Identify and explain FIVE deficiencies in Third Floor Ltd’s system of internal control over the wages system that could lead to misstatements in the financial statements, and, for each deficiency, suggest an internal control to overcome that deficiency. (15 marks)

Answer

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Tags: Deficiencies, Internal Control, Misstatements, Recommendations, Risk, Wages system
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: MAY 2018

PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector

Identifies two categories of persons exempted from the contributory pension scheme and discusses three deficiencies of the scheme.

Question

Required:

Identify TWO categories of persons exempted from the scheme.
Discuss THREE deficiencies of the scheme.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Deficiencies, Exemptions, Pension Schemes, Public Sector, Retirement Benefits
Level: Level 2

Topic: Pension Accounting in the Public Sector
Series: NOV 2019

AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment

States the auditor's responsibilities when significant deficiencies in internal control are identified during an audit.

Question

A significant deficiency in internal control is one which merits the attention of those charged with governance.

Required:
State THREE (3) requirements of an Auditor when there are deficiencies in internal control of a client.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditor's responsibility, Corporate Governance, Deficiencies, Internal Control, ISA
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: DEC 2022

AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

This question addresses identifying deficiencies in an inventory count, implications, and recommendations.

Question

The count instructions were received by both you and the counters the day before the count was due to take place. The instructions consisted of the following five points:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Deficiencies, Inventory Count, Recommendations
Level: Level 2

Topic: Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements
Series: NOV 2015

AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment

Identifies deficiencies in a company's wages system and provides recommendations to prevent misstatements in financial statements.

Question

The following information is available concerning the wages systems:

Workers on each site are controlled by a foreman. The foreman has a record of all employee numbers and can issue temporary numbers for new employees.
Any overtime is calculated by the computerised wages system and added to the standard pay.
The two staff in the wages department make amendments to the computerised wages system in respect of employee leave, illness, as well as setting up and maintaining all employee records.
The computerised wages system calculates deductions from gross pay, such as employee taxes (PAYE), and other statutory deductions.
Finally, a list of net cash payments for each employee is produced. Cash is delivered to the wages office by secure courier. The two staff place cash into wages envelopes for each employee along with a handwritten note of gross pay, deductions, and net pay. The envelopes are given to the foreman for distribution to the individual employees.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Deficiencies, Internal Control, Misstatements, Recommendations, Risk, Wages system
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: MAY 2018

Question Tag: Deficiencies

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PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector

Identifies two categories of persons exempted from the contributory pension scheme and discusses three deficiencies of the scheme.

AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment

States the auditor's responsibilities when significant deficiencies in internal control are identified during an audit.

AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

This question addresses identifying deficiencies in an inventory count, implications, and recommendations.

AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment

Identifies deficiencies in a company's wages system and provides recommendations to prevent misstatements in financial statements.

PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector

Identifies two categories of persons exempted from the contributory pension scheme and discusses three deficiencies of the scheme.

AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment

States the auditor's responsibilities when significant deficiencies in internal control are identified during an audit.

AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

This question addresses identifying deficiencies in an inventory count, implications, and recommendations.

AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment

Identifies deficiencies in a company's wages system and provides recommendations to prevent misstatements in financial statements.

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PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector

Identifies two categories of persons exempted from the contributory pension scheme and discusses three deficiencies of the scheme.

You're reporting an error for "PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector"

AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment

States the auditor's responsibilities when significant deficiencies in internal control are identified during an audit.

You're reporting an error for "AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment"

AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

This question addresses identifying deficiencies in an inventory count, implications, and recommendations.

You're reporting an error for "AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements"

AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment

Identifies deficiencies in a company's wages system and provides recommendations to prevent misstatements in financial statements.

You're reporting an error for "AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment"

PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector

Identifies two categories of persons exempted from the contributory pension scheme and discusses three deficiencies of the scheme.

You're reporting an error for "PSA&F – Nov 2019 – L2 – Q3a – Pension Accounting in the Public Sector"

AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment

States the auditor's responsibilities when significant deficiencies in internal control are identified during an audit.

You're reporting an error for "AA – Dec 2022 – L2 – Q5d – Audit and Assurance Risk Environment"

AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

This question addresses identifying deficiencies in an inventory count, implications, and recommendations.

You're reporting an error for "AA – Nov 2015 – L2 – Q1a – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements"

AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment

Identifies deficiencies in a company's wages system and provides recommendations to prevent misstatements in financial statements.

You're reporting an error for "AA – May 2018 – L2 – Q2b – Audit and Assurance Risk Environment"

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