View the step-by-step solution to:

Consider the following two independent material situations. a) Robyn Young was the CEO and director of PACT Ltd, until she died unexpectedly.

Consider the following two independent material situations.

a) Robyn Young was the CEO and director of PACT Ltd, until she died unexpectedly. After her death,her son, Winston, became the new CEO of PACT Ltd and embarked on a cost-cutting exercise, which

included a reduction in key staff in the credit department.
b) During the planning stage of the audit of PACT Ltd, the audit senior assessed the sales control systems to be effective. But when testing sales, the audit assistant traced two sales to supporting documentation (invoices) with dates for the prior financial year.
Required:
For each of the two situations described above:
i) Provide a brief explanation as to why the situation constitutes an audit risk
ii) Indicate and justify the component of the audit risk model affected
iii) Indicate the key account balance(s) affected
iv) Indicate the audit assertion(s) to be tested
Please present your answer in a table as follows:
Why the
situation
constitutes an
audit risk?

Component of
the audit risk
model affected

Key
account
balance(s)
affected*

Audit
assertion(s)
to be
tested*
a)
b)
Sign up to view the entire interaction

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question