EXERCISE 4 - COMPLETING AUDIT PROCESS - SESI 1 2023 2024 NEW
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School
Politecnic Ungku Omar**We aren't endorsed by this school
Course
ACCOUNTING LAW485
Subject
Accounting
Date
Dec 26, 2024
Pages
3
Uploaded by ChancellorBook11711
1COMMERCE DEPARTMENTEXERCISE 4 – COMPLETING THE AUDIT PROCESS &AUDIT REPORTSESI 1 : 2023/2024DPA50153 AUDIT 2CLASS SECTION: DAT5A / DAT5BLECTURER’S NAME:GROUP MEMBERS:MATRIX NO.STUDENT’S NAME01DAT21F1006AINNA FATIN SYAFIQAH BT ABDUL RAZAK01DAT21F1010NUR SYAKILA BT MASLI01DAT21F1073MAHAREESSHANA KRISHNAH RAO
201DAT21F1074NUR SHAFIQAH SYAZWANI BT MOHD NORDPA50153 – EXERCISE 4Instructions:Answer all questions.QUESTION 1Explain the purpose of declaration of Management Representation Letter to the external auditor.QUESTION 2The audit report dated 28 February 2022 and AQ Solutions Berhad’s fiscal year ends on 31 December 2021. Indicate the audit procedures that notifies the auditor to each of the transactions or events listed below, as well as the format and justifications for each disclosure or adjustment made to the financial statements.Simulate the recommended course of action for each of the following situations:a)The business got a supply of raw materials from Alaska on January 3, 2022. Orders for the materials were placed in October 2021 and FOB shipping points received the commodities in November 2021.b)AQ Solution Berhad has filed a lawsuit against the manufacturer of the expired silage. The attorney for your client thinks there is a good chance the firm will prevail in court and reclaim the RM210 million losses as a result of the customer’s lawsuit and the product recall.c)A debtor who had a significant amount that was overdue at year’s end filed for bankruptcy on February 5, 2022.d)Numerous employees in one of the company’s sites were injured in a big explosion which occurred on January 20, 2022, according to local media.QUESTION 3The following events occurred after the year end but before the audit report was prepared.
3You are required to ascertain the appropriate action for each event from the option below:Adjust the financial statementsNo action is requiredRequest client to recall for revision on financial statementDisclose the information in the notes to theaccounts / footnote in financial statementEventsAppropriate actionEvent 1The granting of previous year salary increases to employees.Event 2Declaration of stock dividend.Event 3Sales of fixed assets at a substantial profit.Event 4Determination by the Lembaga Hasil Dalam Negeri of additional income tax due for a prior year.Event 5A fire at the company warehouse destroys all the inventories.QUESTION 4Identify the appropriate elements of the audit report based on the statements given.a)Clearly indicates that it is the report of an independent auditor.b)Selecting and applying appropriate accounting policies.c)Identify the entity whose financial statements have been audited.d)To express an opinion on the financial statements based on the audit.