AUE_3701_exam_pack

CONTENTS MAY/JUNE 2015……………………………………………………….3 OCT/NOV 2014………………………………………………………….8 MAY/JUNE 2014………………………………………………………..13 OCT/NOV 2014………………………………………………………….20 3 | P a g e AUE 3701 JUNE 2015 1.1 SHORT COMING IN TERMS OF THE REQUIREMENTOF AUDIT DOCUMENTATION -No name of who performed the audit work is provided -No name of who reviewed the audit work -No dates and extent of such review was given -No significant matters arising from the audit was given -Nature, timing and extent of audit procedures were not given 1.2 CHECKLIST OF THE ADDITIONAL CRITERIA TO BE CONSIDERED BEFORE ACCEPTING A STATUTORY AUDIT ENGAGEMENT. CHECKLIST QUESTION YES/NO -Is there any condition which affects independence of the auditor? No -Does ABC have sufficient knowledge about the audit client No -Does ABC have sufficient personnel to perform the audit Yes -Does ABC need an expert in terms of IFRS as they have a subsidiary Yes 4 | P a g e -Does Davies allow communication with previous auditor No -Will Davie be able to pay audit fee considering penalties after being sued? No -Does ABC have appropriately qualified personnel for the audit Yes -Does ABC want consider itself with Davies whilst management integrity is questionable No RISK INDICATOR AUDIT RISK AT FINANCIAL STATEMENT LEVEL Listed on the JSE AFS might be maternally misstated as the company might not comply with JSE regulations resulting in the delisting of the company and affecting the going concern of the company. New Client AFS may be maternally misstated, as material misstatements and errors could go undetected as we are not familiar with the client. AFS may be fraudulently maternally misstated by management because the new auditors have limited knowledge of the entity. Management’s integrity questionable AFS may be maternally misstated. As the control environment might be compromised by management who lake integrity. Laws and Regulations in industry AFS may be maternally misstated, as the entity might not comply properly with the relevant laws and regulations, possibly resulting in material misstatements of unrecorded liabilities, expenses Outlets situated across South Africa Control environment in other locations might not be operating effectively resulting in fraudulent activities.