问答题
(a) ISA 300 Planning an Audit of Financial Statements provides guidance to auditors. Planning an audit involves establishing the overall audit strategy for the engagement and developing an audit plan. Adequate planning benefits the audit of financial statements in several ways.
Required:
Explain the importance of audit planning. (5 marks)
【正确答案】Importance of audit planning
– It helps the auditor to devote appropriate attention to important areas of the audit.
– It helps the auditor to identify and resolve potential problems on a timely basis.
– It helps the auditor to properly organise and manage the audit engagement so that it is performed in an effective and efficient manner.
– It assists in the selection of engagement team members with appropriate levels of capabilities and competence to respond to anticipated risks and the proper assignment of work to them.
– It facilitates the direction and supervision of engagement team members and the review of their work.
– It assists, where applicable, in the coordination of work done by experts.
【答案解析】
问答题
(b) You are the audit senior in charge of the audit of Swandive Co (Swandive), and have been informed by your audit manager that during the year a fraud occurred at the client. A payroll clerk set up fictitious employees and the wages were paid into the clerk’s own bank account. This clerk has subsequently left the company, but the audit manager is concerned that additional frauds have taken place in the wages department.
Required:
Describe procedures which should be undertaken during the audit of wages as a result of the manager’s assessment of the increased risk of fraud.(5 marks)
【正确答案】Procedures due to increased risk of fraud
The audit senior should consider undertaking the following procedures as a result of the increased risk of the payroll fraud.
– Discuss with management and those charged with governance as to whether they are aware of any other payroll frauds or potential frauds.
– Review board minutes for evidence of management discussion of the materiality of the payroll fraud and to the existence of any additional frauds or suspected frauds.
– Discuss with the payroll manager the nature of the payroll fraud, how it occurred and the financial impact of amounts incorrectly paid into the payroll clerk’s bank account.
– Review the supporting documentation to confirm the total of the fraudulent payments made and assess the materiality of this misstatement.
– Review and test the internal controls surrounding setting up of and payments to new joiners to assess whether further frauds may have occurred.
– Consider whether other information obtained by the audit team indicates risks of additional material misstatements with regards to payroll fraud.
– Obtain a written representation from management acknowledging that they have disclosed to the auditors all knowledge of actual and suspected payroll frauds.