c Any three of the following are considered acceptable responses Uncorrected

C any three of the following are considered

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statement that the auditor has nothing to report. (c) Any three of the following are considered acceptable responses: Uncorrected misstatements. Details surrounding the significant control deficiency around revenue. Inaccurate forecasting and aggressive assumptions used in VIU calculation. A description of the KAM. Requests for written representations. The fact that the inconsistency in the other information has been amended. Learning outcomes Plan, perform and complete the audit of historical financial statements. Apply international Auditing Standards, or national Generally Accepted Auditing Standards, and applicable laws and regulation to an audit assignment. Prepare an auditor’s report in accordance with relevant Auditing Standards This question relates to the following CSG units and topics: Unit Topic 7 Fair value and value in use assessments 9 Evaluating misstatements Communication with those charged with governance 10 Audit opinions Audit reports
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Chartered Accountants Program Audit & Assurance AAA118 Main exam suggested solutions Page 7 Question 4 (20 marks) Part A (13 marks) (a) The appropriate Standard is ISRE 2410, ASRE 2410, or NZ SRE 2410because the engagement was to review historical financial information and B+ is the auditor of the entity. (b) The appropriate benchmark is revenue. Benchmark for materiality in a review engagement is determined using professional judgement and the needs of the users of financial statements. In this scenario, the users of the financial statements are the same group that was considered when determining materiality for the audit. Therefore, it would be appropriate for the selected benchmark to remain the same as in the audit. In addition, revenue is the most appropriate benchmark due to volatility in profit. Materiality for the half year review is calculated as 1% of revenue of $239 million = $2.39 million. (c) Below are five of the most commonly accepted responses. Examples procedures Enquire of Telwi’s board about its plans for future actions relating to the delivery of cost reduction initiatives OR renegotiation of current media purchase contracts Enquire of Telwi’s management about the new borrowing facility to determine whether it is appropriate to enable Telwi to meet its debts as and when they fall due Read the minutes of Telwi’s board meetings to identify matters relevant to the going concern assessment and enquire about the matters discussed at the meetings Discuss with Telwi’s management the reasonableness of their cash flow forecast and the budget for the 12 months from the date of the report Consider the adequacy of disclosure about going concern matters in the financial statements (d) Unmodified conclusion because sufficient appropriate evidence has been obtained and no material misstatements have been identified. An emphasis of matter paragraph should be included to highlight the going concern issue.
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