Mandy Lee, a junior auditing staff member at ABC Trading Ltd. assists you in executing the audit contract for As the on-duty audit manager, you have a responsibility to properly train and supervise your deputies. Mandy made the following comments:

(a) “The establishment of the company's internal control system is the responsibility of the managers.”

(b) “As internal controls are so important to the operations of ABC Trading Ltd., as auditors, we must focus on all aspects of internal controls, from checks that ensure accuracy of entry in the ledgers to timely checks. Delivery of goods to customers.”

(c) “Based on the work done to understand internal controls, internal controls at ABC Trading Ltd. appear to be strong. In this case, we as auditors need to take a substantive approach. ”

(d) "Evidence in the form of bank statements or statements of suppliers is equally reliable as compared to bank reconciliations or amortization schedules prepared by the customer."

Required: 

Comment on Mandy's statements above. You must indicate whether Mandy's views are correct. Justify in detail if he is right, or advise him where he is wrong.

Answer rating: 100% (QA)

a Mandys statement The establishment of the companys internal control system is the responsibility of the managers Comment Mandy is correct in stating that the establishment of the companys internal c... View the full answer