Explain what further evidence you would seek in relation, Auditing

1. On 5 August 2012, the financial controller informed you that the board has recently received a letter from the assistant general manager, Mr. Tan. The letter contains a confession: Mr. Tan has been lodging fraudulent expense claims over the past 5 years, amounting to some $40,000. The financial controller's preliminary estimates indicate that this figure is materially correct; however he believes it will take at least another 2 months before the exact figure is known. The police had been informed of the fraud and are searching for Mr. Tan, who appears to have left the country.

2. On 17 August 2012, the financial controller informed you that on the previous day a participant on one of the club's aerobics classes, Ms. Peters, injured herself after slipping on the gym floor. Ms. Peters is the spouse of one of the state's leading barristers. A preliminary letter has already been received from Mr. Peters, stating that Ms. Peters intends to take legal action to recover the costs of medical treatment, plus damages, from the club.

3. On 18 August 2012, the financial controller informed you that a serious fire occurred at one of the club's kitchens during football celebrations. Although covered by insurance, the fire caused extensive damage to the bistro area and the adjacent bar. Both the bistro and bar are expected to remain unserviceable until at least mid-September, resulting in an expected fall in revenue of around 7%.

4. On 23 August 2012, the general manager informed you that on 18 August 2012 the board decided to sell land it was holding as a long term investment. It seemed that a very generous offer was made by an overseas buyer. The contract is due to be signed on 25 August 2012.

5. On 11 August 2012, the board signed a contract for the upgrade of the club's air-conditioning system. The upgrade is necessary to ensure compliance with workers compensation regulations. The first payment of $100,000 is due on 1 September 2012. Work will be completed (and the final contract payment made) by 30 June 2012.

Required

(a) Explain what further evidence you would seek in relation to each of these matters.
(b) Describe the action, if any, you would recommend to management in relation to the accounting treatment of each items.

Posted Date: 4/6/2013 3:14:36 AM | Location : United States







Related Discussions:- Explain what further evidence you would seek in relation, Assignment Help, Ask Question on Explain what further evidence you would seek in relation, Get Answer, Expert's Help, Explain what further evidence you would seek in relation Discussions

Write discussion on Explain what further evidence you would seek in relation
Your posts are moderated
Related Questions
Techniques of obtaining evidence ISA 500 mentions them as: (a) Inspection of records or documents, (b) Inspection of tangible assets, (c) Observation, (d) Inquiry, (e) C

Q. Explain about Wash Sale? Wash Sale - A wash sale takes place if stock or securities are sold at a LOSS and seller acquires substantially identical stock or SECURITIES 30 day

oversee commission staff to ensure individuals are properly trained and monitored probable risks, controls and audit tests

Post Balance Sheet Events Post balance sheet events occupy a very significant place in auditing and hence there is generally a program of work which is carried out in this are


How to involve people in audit? Ans) Use audits as opportunities to train others. Ask for a volunteer (who is not an auditor) to walk by the audit process with you as an assista

Going Concern Considerations - Audit Process IAS 1 Presentation of Financial Statements knows the going related assumption as one of the fundamental assumptions that underlie

project report on absorption of overhead and its different method

Information in the Fixed Assets Register The register can obtain the following information: i. Fixed asset number. ii. The cost and the date of purchase. iii. Descrip

Limitation of Audit Evidence The quantity and quality of evidence is constrained through the following factors as: Absolute proof is not possible; Some assert