Review the accident log book from a sample of locations.Discuss the definition of a ‘serious’ accident (as opposed to a ‘minor’ accident) andestablish the nature of criteria applied to an accident to determine whether it isserious.Review correspondence with legal advisors which may indicate legal action beingtaken against Eastwood Co in respect of serious accidents in the workplace.Review minutes of board meetings for discussions of any serious accidents andassociated repercussions for the company.Ascertain through discussion with management and/or legal advisors, if EastwoodCo has any convictions for health and safety offences during the year (which couldindicate that serious accidents have occurred).Enquire as to whether the company has received any health and safety visits (theregulatory authority would usually perform one if an employee has a seriousaccident). Review documentation from any health and safety visits for evidence ofany serious accidents.Consider talking to employees to identify if any accidents have not been recordedin the accident book.(ii)Procedures to verify the annual training spend per employeeReview Eastwood Co’s approved training budget incomparison to previous yearsto ascertain the overall level of planned spending on training.Obtain a breakdown of the total training spend and review for any items mis-classified as training costs.Agree significant components of the total training spend to supportingdocumentation such as contracts with training providers and to invoices receivedfrom those providers.Agree the total amount spent on significant training programmes to cash bookand/or bank statements.Using data on total number of employees provided by the payroll department,recalculate the annual training spend per employee.
CopyrightFirst Intuition 2017338Assignment answersACCA P7EXAMINER’SCOMMENTS:PART(c)This requirement was inadequately attempted overall. Answers were usually extremelybrief, and it was clear that most candidates did not know the requirements of ISA 720TheAuditor’s Responsibilities in Relation to Other Information.Most answers took a guess thatthe matter would need to be discussed with management, and that if unresolved therewould be some kind of impact on the auditor’s report (an ‘except for’ opinion was the usualrecommendation). Some candidates assumed that some kind of money laundering wastaking place, leading to irrelevant discussions of reporting the situation to outsideauthorities. Very few candidates recognised that if uncorrected, the issue should be includedthe audit report, as required by ISA 720.(c)Briefing notesTo:Trainee AccountantSubject:Other information–auditor’s responsibilities(i)IntroductionThese briefing notes explain the auditor’sresponsibility in relation to other informationpublished with the financial statements. The notes then consider the situation in respectof Eastwood Co, where there is currently a discrepancy between a disclosure in thefinancial statements, and the other information.
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