Puan Yaya is the senior partner of Yaya & Co, a Chartered Accountants firm, which consists...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Puan Yaya is the senior partner of Yaya & Co, a Chartered Accountants firm, which consists of five partners and 20 audit staff. Recently, the audit firm has been appointed as the external auditor of nation's leading jewelers "Habaib Jewelries Bhd." located at Kuala Lumpur. In order to complete this audit assignment within a month, a new audit team has been formed comprising Miss Zaza, a senior partner as the team leader and four other audit staff to assist him in the completion of the audit. Habaib Jewelries import almost ninety percent of their diamond and gold jewels requirement from overseas manufacturers. Apart from their Kuala Lumpur headquarter they also have four branches situated in important towns for the sale of their goods. In addition, their marketing division exports all types of their products to Japan, China, Hong Kong, Taiwan and South Korea. Despite the fact that no member of this audit team has previous experience in the audit of jewelries, the team members chartered out an audit program, planned to review their progress weekly and commenced their audit work. In fact one of their team members, Sarah, her husband has been working in Habaib Jewelries Bhd. as the Finance Manager and this helped the team to a great extent to obtain relevant records and information from the management. During the review of accounts receivables balance En.Anuar the audit staff noticed that nearly RM4 million has been over due from a customer in Hong Kong for more than three years as of the balance sheet date. On enquiry, the management replied in writing that they are more confident of collecting the dues even though they have stopped exporting their products three years ago to this customer. This matter has been discussed in the weekly review meeting and the team leader accepted the management reply. An examination of the balance sheet by En.Khairul the audit staff reveals that the jewelers disclosed RM1.2 billion inventories in the form of diamond and gold jewels. Despite the fact that the team members have no knowledge on how to place value on jewels, which normally requires the assistance of special technicians called jewel appraisers, it has been decided in the weekly review meeting to accept the inventory value furnished by the directors in their representation letter. At the end of one month the audit firm has issued a clean report to their client. Required b. (i) Discuss whether the auditors had been negligent in performing their duty by inventory valuation as declared in the management accepting the representation letter. Puan Yaya is the senior partner of Yaya & Co, a Chartered Accountants firm, which consists of five partners and 20 audit staff. Recently, the audit firm has been appointed as the external auditor of nation's leading jewelers "Habaib Jewelries Bhd." located at Kuala Lumpur. In order to complete this audit assignment within a month, a new audit team has been formed comprising Miss Zaza, a senior partner as the team leader and four other audit staff to assist him in the completion of the audit. Habaib Jewelries import almost ninety percent of their diamond and gold jewels requirement from overseas manufacturers. Apart from their Kuala Lumpur headquarter they also have four branches situated in important towns for the sale of their goods. In addition, their marketing division exports all types of their products to Japan, China, Hong Kong, Taiwan and South Korea. Despite the fact that no member of this audit team has previous experience in the audit of jewelries, the team members chartered out an audit program, planned to review their progress weekly and commenced their audit work. In fact one of their team members, Sarah, her husband has been working in Habaib Jewelries Bhd. as the Finance Manager and this helped the team to a great extent to obtain relevant records and information from the management. During the review of accounts receivables balance En.Anuar the audit staff noticed that nearly RM4 million has been over due from a customer in Hong Kong for more than three years as of the balance sheet date. On enquiry, the management replied in writing that they are more confident of collecting the dues even though they have stopped exporting their products three years ago to this customer. This matter has been discussed in the weekly review meeting and the team leader accepted the management reply. An examination of the balance sheet by En.Khairul the audit staff reveals that the jewelers disclosed RM1.2 billion inventories in the form of diamond and gold jewels. Despite the fact that the team members have no knowledge on how to place value on jewels, which normally requires the assistance of special technicians called jewel appraisers, it has been decided in the weekly review meeting to accept the inventory value furnished by the directors in their representation letter. At the end of one month the audit firm has issued a clean report to their client. Required b. (i) Discuss whether the auditors had been negligent in performing their duty by inventory valuation as declared in the management accepting the representation letter. Puan Yaya is the senior partner of Yaya & Co, a Chartered Accountants firm, which consists of five partners and 20 audit staff. Recently, the audit firm has been appointed as the external auditor of nation's leading jewelers "Habaib Jewelries Bhd." located at Kuala Lumpur. In order to complete this audit assignment within a month, a new audit team has been formed comprising Miss Zaza, a senior partner as the team leader and four other audit staff to assist him in the completion of the audit. Habaib Jewelries import almost ninety percent of their diamond and gold jewels requirement from overseas manufacturers. Apart from their Kuala Lumpur headquarter they also have four branches situated in important towns for the sale of their goods. In addition, their marketing division exports all types of their products to Japan, China, Hong Kong, Taiwan and South Korea. Despite the fact that no member of this audit team has previous experience in the audit of jewelries, the team members chartered out an audit program, planned to review their progress weekly and commenced their audit work. In fact one of their team members, Sarah, her husband has been working in Habaib Jewelries Bhd. as the Finance Manager and this helped the team to a great extent to obtain relevant records and information from the management. During the review of accounts receivables balance En.Anuar the audit staff noticed that nearly RM4 million has been over due from a customer in Hong Kong for more than three years as of the balance sheet date. On enquiry, the management replied in writing that they are more confident of collecting the dues even though they have stopped exporting their products three years ago to this customer. This matter has been discussed in the weekly review meeting and the team leader accepted the management reply. An examination of the balance sheet by En.Khairul the audit staff reveals that the jewelers disclosed RM1.2 billion inventories in the form of diamond and gold jewels. Despite the fact that the team members have no knowledge on how to place value on jewels, which normally requires the assistance of special technicians called jewel appraisers, it has been decided in the weekly review meeting to accept the inventory value furnished by the directors in their representation letter. At the end of one month the audit firm has issued a clean report to their client. Required b. (i) Discuss whether the auditors had been negligent in performing their duty by inventory valuation as declared in the management accepting the representation letter. Puan Yaya is the senior partner of Yaya & Co, a Chartered Accountants firm, which consists of five partners and 20 audit staff. Recently, the audit firm has been appointed as the external auditor of nation's leading jewelers "Habaib Jewelries Bhd." located at Kuala Lumpur. In order to complete this audit assignment within a month, a new audit team has been formed comprising Miss Zaza, a senior partner as the team leader and four other audit staff to assist him in the completion of the audit. Habaib Jewelries import almost ninety percent of their diamond and gold jewels requirement from overseas manufacturers. Apart from their Kuala Lumpur headquarter they also have four branches situated in important towns for the sale of their goods. In addition, their marketing division exports all types of their products to Japan, China, Hong Kong, Taiwan and South Korea. Despite the fact that no member of this audit team has previous experience in the audit of jewelries, the team members chartered out an audit program, planned to review their progress weekly and commenced their audit work. In fact one of their team members, Sarah, her husband has been working in Habaib Jewelries Bhd. as the Finance Manager and this helped the team to a great extent to obtain relevant records and information from the management. During the review of accounts receivables balance En.Anuar the audit staff noticed that nearly RM4 million has been over due from a customer in Hong Kong for more than three years as of the balance sheet date. On enquiry, the management replied in writing that they are more confident of collecting the dues even though they have stopped exporting their products three years ago to this customer. This matter has been discussed in the weekly review meeting and the team leader accepted the management reply. An examination of the balance sheet by En.Khairul the audit staff reveals that the jewelers disclosed RM1.2 billion inventories in the form of diamond and gold jewels. Despite the fact that the team members have no knowledge on how to place value on jewels, which normally requires the assistance of special technicians called jewel appraisers, it has been decided in the weekly review meeting to accept the inventory value furnished by the directors in their representation letter. At the end of one month the audit firm has issued a clean report to their client. Required b. (i) Discuss whether the auditors had been negligent in performing their duty by inventory valuation as declared in the management accepting the representation letter.
Expert Answer:
Answer rating: 100% (QA)
Based on the given information it appears that the auditors may have been negligent in accepting the ... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The senior partner of an accounting firm is looking for ways to increase the firms business. What other services besides traditional accounting can the firm offer to its clients? What new challenges...
-
In order to complete your case analysis successfully, you must identify the role you are playing, assess user needs analyze user needs or issues (qualitatively and quantitatively), and provide a...
-
You have recently been appointed as the external auditor of 123 Limited, a manufacturer of refrigeration and air conditioning units. It is six months until the companys year end. 123 Limited had...
-
Dylan Flaherty, marketing clerk for TipTop Marketing Agency, recorded the following information for last year: He would like to be able to estimate customer service costs using the number of...
-
The left column lists the titles of documents and accounts used in job order cost accounting. The right column presents short descriptions of the purposes of the documents. Match each document in the...
-
Figure 4.46 shows a tank of water with a circular pipe connected to its bottom. A circular gate seals the pipe opening to prohibit flow. To drain the tank, a winch is used to pull the gate open....
-
Help for Insomniacs A recent study shows that just one session of cognitive behavioral therapy can help people with insomnia. In the study, forty people who had been diagnosed with insomnia were...
-
A Bloomberg Businessweek North American subscriber study collected data from a sample of 2861 subscribers. Fifty-nine percent of the respondents indicated an annual income of $75,000 or more and 50%...
-
1. Julia saves $38 at the end of each week and deposits the money in an account paying 7% compounded monthly. How much will Julia accumulate in 6 years? How much of the accumulated amount is...
-
For the partially submerged backfill in Problem 13.13 (Figure 13.37), determine the Rankine's passive force per unit length of the wall and the location of the resultant In problem 13 Problem HH Y1 ...
-
Find the gain/loss on sale of property from these two figures Freehold property at cost/valuation (revalued 1 January 2020): $1,380,000 Asset revaluation reserve on property:$480,000 Additional...
-
Juett Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 70,000 units per month is as follows: Direct...
-
What role does systems thinking play in fostering a holistic approach to organizational design and management? explain
-
Required: Compute the Drying Department's equivalent units of production for pulping and conversion. Compute the Drying Department's cost per equivalent unit for pulping and conversion. Compute the...
-
Find (f-g)(2) when f(x) = 2x -5 and g(x)=x+3.
-
How do stakeholder engagement strategies inform organizational governance structures and contribute to sustainable value creation ?Explain
-
The Burren Inc. is considering investing in projects 1 and 2. The initial cost of project 1 is 3,000 and 2,000 for project 2. Each project lasts four years. Straight-line depreciation method is used....
-
After looking at the resources, explain what a spirit image is. Why might looking at a god and/or a human in terms of their spirit be helpful if you want to eliminate some of the divisions between...
-
Complete problem P10-19 using ASPE. Data from P10-19 Original cost .............................................................................. $4,000,000 Accumulated depreciation...
-
IFRS, ASPE, and US GAAP each have a conceptual framework. Explain why a conceptual framework is necessary for a set of high quality accounting standards. Provide three reasons by considering the...
-
a. Briefly discuss how the amortization of discounts and premiums on financial instruments are classified in an IFRS-based statement of cash flows. b. Briefly discuss how other comprehensive income...
-
An old-fashioned tire swing exerts a force on the branch and a torque about the point where the branch meets the trunk. If you hang the swing closer to the trunk, this will --the force and-- the...
-
Which of these objects is in static equilibrium? A. B. C. D.
-
A beam with a pivot on its le ft end is suspended from a rope. Tn which direction is the force of the pivot on the beam? A. B. C. D. E.
Study smarter with the SolutionInn App