Environmental and Sustainability Audits

AAA – Nov 2014 – L3 – SC – Q6 – Environmental and Sustainability Audits

Evaluates the risks and considerations of tendering for the audit of Lagos Leisure Ltd, including fee estimation and tender document components.

Question

You are the senior audit manager for a medium-sized firm of accountants. Your firm has just lost two clients which have gone into receivership and has now been invited to tender for the audit of Lagos Leisure Ltd. The audit fees have been initially estimated at ₦200,000.

Lagos Leisure Ltd is a medium-sized manufacturing organisation which has existed for 35 years and has generally made consistent profits. However, in the last two years, profits have fallen by approximately 10% in each year, although the market sector in which Lagos Leisure Ltd operates is expanding. The company has also stated that they would like some consultancy support regarding business strategy in order to try and reverse the current profit downturn and have set aside ₦1m for this.

You have ascertained the following from a brief discussion with the Managing Director:

There has been no investment in non-current assets in the last 10 years. The company was intending to start a program of investment two years ago but this was cancelled due to reduced profits, and maintenance and repair costs have increased significantly over the last year.
Staff remuneration has been frozen, and there has been some discussion with unions as staff morale is very low and several staff have already left. So far, industrial action has been avoided.
The Financial Director was dismissed three months ago and hasn’t been replaced; he is currently suing Lagos Leisure Ltd for unfair dismissal.
The Managing Director is due to retire next year; a replacement has not yet been considered.
There is an outstanding litigation as an employee is suing Lagos Leisure Ltd due to an accident in the workplace, and the authorities have written a detailed report about the case.

Your firm’s total fee income last year was ₦7m, including ₦500,000 from the lost clients.

Required:

(a) Discuss the advantages and disadvantages of tendering for the audit of Lagos Leisure Ltd, highlighting any key risks to your firm. (7 Marks)

(b) Although the initial estimate of the audit fee was ₦200,000, further work needs to be done before a figure could be included in the tender document. List the factors which should be taken into account when calculating this fee. (4 Marks)

(c) Outline the matters which should be included in the tender document if the firm decides to tender. (4 Marks)

Answer

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Tags: Audit Fees, Audit strategy, Client Acceptance, Consultancy, Litigation, Risk Assessment, Staff Issues, Tender Document
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2014

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

Question

Green Issues

Oil and Gas Limited is a company involved in the upstream petroleum activities in the Delta Region. The restiveness of the youth in this area of operation was a result of environmental degradation of the region. Your firm has just been appointed as the auditors to the company. During the preliminary planning stage of the audit, you realised that the environmental issues could have an impact on the financial statements.

Required:

(a) Enumerate EIGHT steps you would include in the audit process in order to highlight environmental issues that may be apparent in the client’s business.

(8 Marks)

(b) Identify SEVEN major social issues that an auditor will be concerned with in a company’s social policy report. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Audit Process, Delta Region, Environmental Issues, Financial Impact, Oil and gas, Social Policy Reporting, Social responsibility, Upstream Activities
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2014

AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits

Define the audit conducted on a company's societal relationships.

Question

An audit which is carried out on a company in respect of its relationship with shareholders, employees, customers, the community in which it operates, and the public at large is known as……………………..

Answer

Find Related Questions by Tags, levels, etc.

Tags: Public Relations, Social responsibility, Stakeholders
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2013

AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits

This question assesses the scope of social audit and identifies an area it does not cover.

Question

Social audit has to do with the extent to which a company gets involved and interacts with the society in which it operates. This means that social audit does not extend to ONE of the following:
A. Corporate code of conduct and business ethics
B. Pricing policy, product safety, and quality control
C. Transaction audit
D. Employee health and safety
E. Environmental pollution

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Ethics, Corporate Responsibility, Environmental audit, Social Audit
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2012

AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits

Section in annual reports for environmental impact disclosure.

Question

The disclosure of information on the effect that the operation of an entity has on the natural environment can be found in……………..section of the annual reports and accounts.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Annual Reports, Environmental Disclosure, Sustainability Reporting
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2011

AAA – Nov 2014 – L3 – SC – Q6 – Environmental and Sustainability Audits

Evaluates the risks and considerations of tendering for the audit of Lagos Leisure Ltd, including fee estimation and tender document components.

Question

You have ascertained the following from a brief discussion with the Managing Director:

There has been no investment in non-current assets in the last 10 years. The company was intending to start a program of investment two years ago but this was cancelled due to reduced profits, and maintenance and repair costs have increased significantly over the last year.
Staff remuneration has been frozen, and there has been some discussion with unions as staff morale is very low and several staff have already left. So far, industrial action has been avoided.
The Financial Director was dismissed three months ago and hasn’t been replaced; he is currently suing Lagos Leisure Ltd for unfair dismissal.
The Managing Director is due to retire next year; a replacement has not yet been considered.
There is an outstanding litigation as an employee is suing Lagos Leisure Ltd due to an accident in the workplace, and the authorities have written a detailed report about the case.

Your firm’s total fee income last year was ₦7m, including ₦500,000 from the lost clients.

Required:

(a) Discuss the advantages and disadvantages of tendering for the audit of Lagos Leisure Ltd, highlighting any key risks to your firm. (7 Marks)

(c) Outline the matters which should be included in the tender document if the firm decides to tender. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Fees, Audit strategy, Client Acceptance, Consultancy, Litigation, Risk Assessment, Staff Issues, Tender Document
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2014

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

Question

Green Issues

Required:

(a) Enumerate EIGHT steps you would include in the audit process in order to highlight environmental issues that may be apparent in the client’s business.

(8 Marks)

(b) Identify SEVEN major social issues that an auditor will be concerned with in a company’s social policy report. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Audit Process, Delta Region, Environmental Issues, Financial Impact, Oil and gas, Social Policy Reporting, Social responsibility, Upstream Activities
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2014

AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits

Define the audit conducted on a company's societal relationships.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Public Relations, Social responsibility, Stakeholders
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2013

AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits

This question assesses the scope of social audit and identifies an area it does not cover.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Ethics, Corporate Responsibility, Environmental audit, Social Audit
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2012

AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits

Section in annual reports for environmental impact disclosure.

Question

The disclosure of information on the effect that the operation of an entity has on the natural environment can be found in……………..section of the annual reports and accounts.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Annual Reports, Environmental Disclosure, Sustainability Reporting
Level: Level 3

Topic: Environmental and Sustainability Audits
Series: NOV 2011

Topic: Environmental and Sustainability Audits

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AAA – Nov 2014 – L3 – SC – Q6 – Environmental and Sustainability Audits

Evaluates the risks and considerations of tendering for the audit of Lagos Leisure Ltd, including fee estimation and tender document components.

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits

Define the audit conducted on a company's societal relationships.

AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits

This question assesses the scope of social audit and identifies an area it does not cover.

AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits

Section in annual reports for environmental impact disclosure.

AAA – Nov 2014 – L3 – SC – Q6 – Environmental and Sustainability Audits

Evaluates the risks and considerations of tendering for the audit of Lagos Leisure Ltd, including fee estimation and tender document components.

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits

Define the audit conducted on a company's societal relationships.

AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits

This question assesses the scope of social audit and identifies an area it does not cover.

AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits

Section in annual reports for environmental impact disclosure.

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AAA – Nov 2014 – L3 – SC – Q6 – Environmental and Sustainability Audits

Evaluates the risks and considerations of tendering for the audit of Lagos Leisure Ltd, including fee estimation and tender document components.

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AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

You're reporting an error for "AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits"

AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits

Define the audit conducted on a company's societal relationships.

You're reporting an error for "AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits"

AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits

This question assesses the scope of social audit and identifies an area it does not cover.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits"

AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits

Section in annual reports for environmental impact disclosure.

You're reporting an error for "AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits"

AAA – Nov 2014 – L3 – SC – Q6 – Environmental and Sustainability Audits

Evaluates the risks and considerations of tendering for the audit of Lagos Leisure Ltd, including fee estimation and tender document components.

You're reporting an error for "AAA – Nov 2014 – L3 – SC – Q6 – Environmental and Sustainability Audits"

AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits

Steps in the audit process to identify environmental issues and major social concerns in a company's social policy report.

You're reporting an error for "AAA – Nov 2014 – L3 – SC – Q5 – Environmental and Sustainability Audits"

AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits

Define the audit conducted on a company's societal relationships.

You're reporting an error for "AAA – Nov 2013 – L3 – AII – Q17 – Environmental and Sustainability Audits"

AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits

This question assesses the scope of social audit and identifies an area it does not cover.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q13 – Environmental and Sustainability Audits"

AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits

Section in annual reports for environmental impact disclosure.

You're reporting an error for "AAA – Nov 2011 – L3 – SAII – Q10 – Environmental and Sustainability Audits"

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