Misstatements – NBC Institute

AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review

Discuss auditor responsibilities for detecting misstatements in different reporting periods and associated audit procedures.

Question

Your firm is the auditor of Sharp Electronics Co. Plc, a listed company, which assembles electronic home appliances for sale on retail and wholesale bases. The electronic appliances parts are purchased from within and outside the country. The extract from the statement of financial position of the company is as follows:

Sharp Electronics Co. Plc – Statement of Financial Position

You have been asked by the partner in charge of the audit to consider your firm’s audit responsibilities with respect to subsequent events, and the associated audit procedures for such matters.

Required:

a. Discuss the responsibilities of the auditors for detecting misstatements in the financial statements during the following periods:

i. From the end of the reporting period up to the date of the audit report. (8 Marks)

ii. After the date of the audit report and before financial statements are issued. (6 Marks)

iii. After the financial statements have been issued. (3 Marks)

b. State the details of the work you will carry out in period (a)(ii) above to identify significant subsequent events affecting the financial statements. (5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditors' responsibilities, Financial Statements, Misstatements, Periodic review, Subsequent Events
Level: Level 3

Topic: Audit Completion and Final Review

AA – May 2022 – L2 – SC – Q7 – Audit Documentation

Discuss factors for assessing materiality and principles for evaluating the impact of misstatements.

Question

Materiality is a fundamental concept in both auditing and accounting. It reflects the fact that users of financial statements find it useful even if they are not 100% accurate.

a. What are the factors that an auditor will consider when assessing whether or not an item is material? (5 Marks)
b. State the principles an auditor will apply in the concept of materiality:
i. When planning and performing the audit. (5 Marks)
ii. When evaluating the effect of misstatements on the financial statements. (5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Financial Statements, Materiality, Misstatements
Level: Level 2

Topic: Audit Documentation
Series: MAY 2022

AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements

Definition of materiality and how its level is assessed during audit planning.

Question

ISA 320 Materiality in Planning and Performing an Audit provides guidance on the concept of materiality in planning and performing an audit.

Required:
Define materiality and determine how the level of materiality is assessed.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Materiality, Audit Planning, ISA 320, Misstatements
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements
Series: MAY 2017

AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting

List circumstances under which an auditor may issue a qualified opinion.

Question

State with details TWO circumstances under which an auditor may issue a qualified opinion. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Scope Limitations, Misstatements, Qualified Opinion
Level: Level 2

Topic: Completion Procedures and Reporting
Series: NOV 2016

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

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

AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review

Discuss auditor responsibilities for detecting misstatements in different reporting periods and associated audit procedures.

Question

Sharp Electronics Co. Plc – Statement of Financial Position

You have been asked by the partner in charge of the audit to consider your firm’s audit responsibilities with respect to subsequent events, and the associated audit procedures for such matters.

Required:

a. Discuss the responsibilities of the auditors for detecting misstatements in the financial statements during the following periods:

i. From the end of the reporting period up to the date of the audit report. (8 Marks)

ii. After the date of the audit report and before financial statements are issued. (6 Marks)

iii. After the financial statements have been issued. (3 Marks)

b. State the details of the work you will carry out in period (a)(ii) above to identify significant subsequent events affecting the financial statements. (5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditors' responsibilities, Financial Statements, Misstatements, Periodic review, Subsequent Events
Level: Level 3

Topic: Audit Completion and Final Review

AA – May 2022 – L2 – SC – Q7 – Audit Documentation

Discuss factors for assessing materiality and principles for evaluating the impact of misstatements.

Question

Materiality is a fundamental concept in both auditing and accounting. It reflects the fact that users of financial statements find it useful even if they are not 100% accurate.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Financial Statements, Materiality, Misstatements
Level: Level 2

Topic: Audit Documentation
Series: MAY 2022

AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements

Definition of materiality and how its level is assessed during audit planning.

Question

ISA 320 Materiality in Planning and Performing an Audit provides guidance on the concept of materiality in planning and performing an audit.

Required:
Define materiality and determine how the level of materiality is assessed.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Materiality, Audit Planning, ISA 320, Misstatements
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements
Series: MAY 2017

AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting

List circumstances under which an auditor may issue a qualified opinion.

Question

State with details TWO circumstances under which an auditor may issue a qualified opinion. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Scope Limitations, Misstatements, Qualified Opinion
Level: Level 2

Topic: Completion Procedures and Reporting
Series: NOV 2016

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: Misstatements

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review

Discuss auditor responsibilities for detecting misstatements in different reporting periods and associated audit procedures.

AA – May 2022 – L2 – SC – Q7 – Audit Documentation

Discuss factors for assessing materiality and principles for evaluating the impact of misstatements.

AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements

Definition of materiality and how its level is assessed during audit planning.

AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting

List circumstances under which an auditor may issue a qualified opinion.

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.

AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review

Discuss auditor responsibilities for detecting misstatements in different reporting periods and associated audit procedures.

AA – May 2022 – L2 – SC – Q7 – Audit Documentation

Discuss factors for assessing materiality and principles for evaluating the impact of misstatements.

AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements

Definition of materiality and how its level is assessed during audit planning.

AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting

List circumstances under which an auditor may issue a qualified opinion.

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.

Our offerings

Contact Info

Customer

Get In Touch

Question Tag: Misstatements

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review

Discuss auditor responsibilities for detecting misstatements in different reporting periods and associated audit procedures.

You're reporting an error for "AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review"

AA – May 2022 – L2 – SC – Q7 – Audit Documentation

Discuss factors for assessing materiality and principles for evaluating the impact of misstatements.

You're reporting an error for "AA – May 2022 – L2 – SC – Q7 – Audit Documentation"

AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements

Definition of materiality and how its level is assessed during audit planning.

You're reporting an error for "AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements"

AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting

List circumstances under which an auditor may issue a qualified opinion.

You're reporting an error for "AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting"

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"

AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review

Discuss auditor responsibilities for detecting misstatements in different reporting periods and associated audit procedures.

You're reporting an error for "AAA – Nov 2021 – L3 – Q4 – Audit Completion and Final Review"

AA – May 2022 – L2 – SC – Q7 – Audit Documentation

Discuss factors for assessing materiality and principles for evaluating the impact of misstatements.

You're reporting an error for "AA – May 2022 – L2 – SC – Q7 – Audit Documentation"

AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements

Definition of materiality and how its level is assessed during audit planning.

You're reporting an error for "AA – May 2017 – L2 – Q3b – Planning and Approach for Audit and Assurance Engagements"

AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting

List circumstances under which an auditor may issue a qualified opinion.

You're reporting an error for "AA – Nov 2016 – L2 – Q5d – Completion Procedures and Reporting"

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"

Our offerings

Contact Info

Customer

Get In Touch

admin