ACCT30004 Suggested Solution - Week 2_2-2015

ACCT30004 Suggested Solution - Week 2_2-2015 - ACCT30004...

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Tute Solution Week 2_2 2015.Docx Updated – 27 July 2015 1 ACCT30004 Auditing and Assurance Services Suggested Solutions and Advice Week 2 Advice When answering preparer-focused questions, it is usually important for the student to begin with the question and then find the information to be able to answer it. In the case of user- focused question, often information contained in the question can be important, even if it doesn’t appear to be. In situation based questions, it is important that students don’t look for the solution to the question in the information provided, rather they should use the information provided to understand the situation, then consider the problem at hand. Examples of questions students should consider to assist with answering these types of questions include: What type of company is it? (eg Public or Proprietary) Who are the users of the financial information? What industry is the company in? What are the risks that exist due to the industry? Are there any specific risks that the company faces at this time? How does the information provided in the situation influence our thinking on the issues that exist? Past Exam Experience Students have tended to give generic answers, or answers that include significant assumptions. The information in the question sets the context of the situation – it is therefore the basis on which you need to propose your solution to the question or problem. An answer should never assume information that is not explicitly included in the facts of the situation, or are reasonable in relation to the facts given. Answers should never be based on ‘might’ (eg. “The managers might engage in earnings management”). Answers can however consider what may occur given the specific detail in the information (eg. “The fact that sales people are paid on commission rather than straight salary may lead to a higher risk of fictitious sales being generated by sales people”). You
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