Justify why the items listed as (1) to (3) in the scenario have been identified as...
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Justify why the items listed as (1) to (3) in the scenario have been identified as key areas of audit risk and, for each item, describe the procedures that should be included in the audit plan in order to address those risks. (24 marks) NOTE: You should present your answer in a two-column format using the headings (i) Justification, and (ii) Procedures to address the risk. (b) In respect of the external audit of Blu, list the requirements that Nigel LLP should communicate to Gunderson LLP and the matters on which the Gunderson LLP audit team should report to Nigel LLP. Explain why such communications are necessary for the completion of the external audit of the Eva group financial statements. (9 marks) (c) State the impact on your firm's audit opinion on the financial statements of Blu for the year ended 31 March 2013 in each of the following situations: (i) the financial statements of Blu do not disclose the sale of the freehold mansion to Chloe as a related party transaction. (ii) there are no records available detailing the receipt and usage of raw ingredients by Mauro in the month of March. Give reasons for your conclusions and describe the modification(s), if any, you would make to the audit report. (7 marks) ष Justify why the items listed as (1) to (3) in the scenario have been identified as key areas of audit risk and, for each item, describe the procedures that should be included in the audit plan in order to address those risks. (24 marks) NOTE: You should present your answer in a two-column format using the headings (i) Justification, and (ii) Procedures to address the risk. (b) In respect of the external audit of Blu, list the requirements that Nigel LLP should communicate to Gunderson LLP and the matters on which the Gunderson LLP audit team should report to Nigel LLP. Explain why such communications are necessary for the completion of the external audit of the Eva group financial statements. (9 marks) (c) State the impact on your firm's audit opinion on the financial statements of Blu for the year ended 31 March 2013 in each of the following situations: (i) the financial statements of Blu do not disclose the sale of the freehold mansion to Chloe as a related party transaction. (ii) there are no records available detailing the receipt and usage of raw ingredients by Mauro in the month of March. Give reasons for your conclusions and describe the modification(s), if any, you would make to the audit report. (7 marks) ष
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Answer rating: 100% (QA)
Audit risk refers to the risk that auditors may give an inappropriate audit opinion on financial statements In the scenario youve presented three items have been identified as key areas of audit risk ... View the full answer
Related Book For
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
Posted Date:
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