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Find Related Questions by Tags, levels, etc.
a) Everclean Water Limited processes and packages portable water for local consumption. The factory is situated in a valley in a first-class residential area of the city. A major road used by most residents runs in front of the factory. Often this road is flooded with spill-over of water from the factory thus hindering vehicular and pedestrian movement. Management of the company on such occasions uses the services of a contractor to pump out the water from the road. This situation contravenes the provisions of the Factories, Offices and Shops Act 1970, Act 328. Everclean Water Limited has engaged Nadab and Associates as the auditors. In their preliminary tour of the factory the senior partners became aware of the flooding situation in the area. Back in the office the senior partners consulted ISA 250 “Consideration of laws and regulations in an audit of financial statements” for guidance on the auditor’s responsibility to consider laws and regulations in an audit of financial statements before carrying out the audit assignment.
i) State examples of the possible type of information that might have come to the auditors’ attention that might indicate non-compliance with the Factories, Offices, and Shops Act. (5 marks)
ii) Evaluate the possible effect on the financial statements for non-compliance with the law according to ISA 250. (5 marks)
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b) Wassaman Company is a private company established in the Wassa District in the Western Region to produce plastic bags to supply to sachet water producers. The company has 10 outlets within the district through which distribution is made to water producers. Employees of the company have been complaining about management’s reluctance to provide the health and safety needs of the company. The chief of the area has also shown his dissatisfaction about the extent of compliance with environmental laws and regulations by the company.
Required:
Discuss the responsibilities of management and the auditor to ensure adherence to laws and regulations. (10 marks)
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a) At a final meeting with the client, DMS Ltd, one of the Audit Partners of DTR & Co Chartered Accountants had an argument with the Finance Director of DMS Ltd on an issue that borders on compliance with a relevant law. The Environmental Protection Authority had sanctioned DMS Ltd for environmental regulation breaches for the year 2016. The Finance Director was of the view that the external auditors are to be blamed for negligently failing to plan their audit to detect such non-compliance with environmental regulations.
Required:
i) Explain the responsibility of external auditors in considering laws and regulations in an audit of financial statements. (2 marks)
ii) Explain the issue of non-compliance in relation to laws and regulations in an audit. (2 marks)
iii) Explain the policies and procedures which may be implemented to assist management in the prevention and detection of non-compliance with laws and regulations. (6 marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
a) Everclean Water Limited processes and packages portable water for local consumption. The factory is situated in a valley in a first-class residential area of the city. A major road used by most residents runs in front of the factory. Often this road is flooded with spill-over of water from the factory thus hindering vehicular and pedestrian movement. Management of the company on such occasions uses the services of a contractor to pump out the water from the road. This situation contravenes the provisions of the Factories, Offices and Shops Act 1970, Act 328. Everclean Water Limited has engaged Nadab and Associates as the auditors. In their preliminary tour of the factory the senior partners became aware of the flooding situation in the area. Back in the office the senior partners consulted ISA 250 “Consideration of laws and regulations in an audit of financial statements” for guidance on the auditor’s responsibility to consider laws and regulations in an audit of financial statements before carrying out the audit assignment.
i) State examples of the possible type of information that might have come to the auditors’ attention that might indicate non-compliance with the Factories, Offices, and Shops Act. (5 marks)
ii) Evaluate the possible effect on the financial statements for non-compliance with the law according to ISA 250. (5 marks)
Find Related Questions by Tags, levels, etc.
b) Wassaman Company is a private company established in the Wassa District in the Western Region to produce plastic bags to supply to sachet water producers. The company has 10 outlets within the district through which distribution is made to water producers. Employees of the company have been complaining about management’s reluctance to provide the health and safety needs of the company. The chief of the area has also shown his dissatisfaction about the extent of compliance with environmental laws and regulations by the company.
Required:
Discuss the responsibilities of management and the auditor to ensure adherence to laws and regulations. (10 marks)
Find Related Questions by Tags, levels, etc.
a) At a final meeting with the client, DMS Ltd, one of the Audit Partners of DTR & Co Chartered Accountants had an argument with the Finance Director of DMS Ltd on an issue that borders on compliance with a relevant law. The Environmental Protection Authority had sanctioned DMS Ltd for environmental regulation breaches for the year 2016. The Finance Director was of the view that the external auditors are to be blamed for negligently failing to plan their audit to detect such non-compliance with environmental regulations.
Required:
i) Explain the responsibility of external auditors in considering laws and regulations in an audit of financial statements. (2 marks)
ii) Explain the issue of non-compliance in relation to laws and regulations in an audit. (2 marks)
iii) Explain the policies and procedures which may be implemented to assist management in the prevention and detection of non-compliance with laws and regulations. (6 marks)
Find Related Questions by Tags, levels, etc.
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