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Instruction – Audit Assignment
 
Question 1:  Answers provided for question 1 are from GOOGLE, might not be right.
Case 1 – 100 words or more
–          Professional ethics – Chapter 3 (eBook) for more information
–          Google’s answer:
In litigations, claims, or assessments like this, it’s the management’s responsibility to adopt policies and procedures that will identify, evaluate, and account for these as a basis for the preparation of the financial statements in conformity with the framework. However, the auditor is required to carry out procedures in order to become aware of this kind of situation that may have a material effect on the financial; statements.
The goal here is to corroborate the information obtained from the management and the consulted legal team. The main thing that the auditor should do is to ask the client to send letters of audit inquiry to lawyers with whom the management has consulted. The letter, prepared by the management and sent by the auditor, should request the lawyers to assist the auditors in obtaining sufficient, appropriate evidence about material litigations
 
In case the management refuses to give the auditor permission to communicate with the lawyer or the lawyer refuses to reply, this would be a scope limitation that will result in either a qualified or disclaimer of opinion.
 
If the lawyer is unable to estimate the likelihood of an unfavorable outcome, the auditor should consider adding an emphasis of a matter paragraph to an unmodified report.
 
 
 
Case 2 – 100 words or more
–          Audit risk assessment – Chapter 9
–          I just list the chapter here to help you search quicker. Disregard if I li

st the wrong one.
–          Google’s answer:
Hedging strategy should be a measure to minimize the risk for the movement of assets and liabilities of the entity.
Errors and weakness that the auditors identified are proof that the internal control and strategies that the treasurer and the company are poor and weak. The company should initiate the move to further enhanced and strengthen the hedging strategies of the company.  The auditors should detailed the findings about the errors and weakness of the strategies and the possible effect both long term and short term. They should also recommend and pin point the process that the errors where or could be seen. If still no response on the audit findings auditors should raise the issue to the senior management and give them detailed conclusion/findings that they can use as guide to perform changes. Auditors may also recommend to hire external parties to guide them to the changes in the strategy
 
Case 3 – 200 words
–          Google’s Answer:
When the audit team unable to gain sufficient appropriate audit evidence around Accounts Receivable due to lack of documentation, the efficient and effective ways is to take the time to really get to know clients and what is going on in their industry. When the audit plan is recorded, writing it down in a memo and the strategies to mitigate. Through this, it can easily to linking the working papers. Auditors must know about the documentation because it is the basis for the review of the quality of work which can provide the supporting evidence.  
 
Case 4 – 500-800 words
–          Use the following table template:
–          Orange texts are incorrect, just for illustration.