- 12 Marks
AA – Nov 2021 – L2 – Q1b – Audit and Assurance Risk Environment
Discusses six business risks faced by an audit firm when auditing a technology retailer.
Question
Mogya Bi Accounting Firm is the Auditors of Abronyeh Enterprise (Abronyeh), a retailer selling computers, phones, and other high-technology equipment. Abronyeh was set up just a year ago by its sole owner Adam Joseph. Adam Joseph has employed several bookkeepers to help him with accounting records and the preparation of financial statements, and the most recent one has just left. In order to start the business, Adam Joseph re-mortgaged his house and, in addition, took out a business loan. As part of the loan agreement, Adam Joseph is obliged to provide a copy of the annual financial statement.
Required:
Explain SIX (6) business risks that Mogya Bi Accounting Firm faces when conducting the audit of Abronyeh and explain why they could be identified as risks.
Find Related Questions by Tags, levels, etc.
- Tags: Audit Risk, Business Risks, Financial Statements, Misstatement, Technology Retailer
- Level: Level 2
- Topic: Audit and Assurance Risk Environment
- Series: NOV 2021