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
Benefits of Internal Audit are following: It is in-expensive. No charted accounted is needed to audit internally. Faults will be removed before preparing financial stateme

Oversee commission staff to ensure individuals are properly trained and monitored. please provide me with some risks, controls and audit tests for the process above.

how EDP audit is carried out

how to operate distribute amount and section rate also provision party bill

Issues in Audit of Intangible Assets The two key issues in such audit of intangible assets are: (a) Recognition of intangible assets The audit problem here is to mak

Required: Describe a complete audit program for collecting relevant evidence for the audit of the estimated warranty liability. Approach: Develop specific assertions related to

IAS 36 Impairment of Assets It is very necessary for the auditor to determine the client's method for determining and accounting for impairments.  Corresponding IAS 36, 'impai

In previous times, the Kings used to hear their accountants narrate the accounts verbally. Though, as the complexity of the accounting function grew, require was felt to thoroughly

Auditor's Procedures - Going Concern In forming a thought on the going to relate position of a company, the auditors have to: a) Examine the company, its plans for the futu

What is an external auditor's responsibility in regard to finding fraud?