You are required to: Write a letter to the managing director, in which you discuss the...

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You are required to: Write a letter to the managing director, in which you discuss the following: a) The potential weaknesses, and your recommendations for improvements, in internal financial controls relevant to disaster; (20) b) The potential financial risks and implications thereof facing ABC Ltd in the event of a disaster; (5) c) Your recommendations for improvements to the disaster recovery plan of ABC Ltd in respect of the financial accounting systems (5) QUESTION 2 (20 MARKS) 1. Mention 3 areas you would consider when obtaining an understanding of the entity & it's environment. (3) 2. Explain briefly the 3 components that make up an audit plan, also provide an example for each component. (3) 3. Explain the difference between Commercial insolvency and factual insolvency. (1) 4. Mention 4 indicators that could indicate whether or not the entity under audit is a going concern. (4) 5. ISA 560 - Subsequent Events, identifies two types of subsequent events. Distinguish between the two types of subsequent events, and indicate how each should be treated in the financial statements. (4) 6. During your "understanding of the entity and its environment" stage of planning for the audit of Nordic (Pty) Ltd, you obtained the following information, amongst other, about the company. (5) a) The company imports large quantities of stock. b) The products sold by Nordic (Pty) Ltd have expiry dates, after which they are not useable. c) Stock is stored in several warehouses across Namibia. d) Nordic has acquired numerous subsidiaries over the past 5 years. Under each acquisition goodwill was recognized and now shown on the Annual Financial Statements. e) 60% of the company's sales are for cash. YOU ARE REQUIRED TO: Indicate per item above what line item on the Annual Financial statements is affected as well as what assertion will be affected. You are required to: Write a letter to the managing director, in which you discuss the following: a) The potential weaknesses, and your recommendations for improvements, in internal financial controls relevant to disaster; (20) b) The potential financial risks and implications thereof facing ABC Ltd in the event of a disaster; (5) c) Your recommendations for improvements to the disaster recovery plan of ABC Ltd in respect of the financial accounting systems (5) QUESTION 2 (20 MARKS) 1. Mention 3 areas you would consider when obtaining an understanding of the entity & it's environment. (3) 2. Explain briefly the 3 components that make up an audit plan, also provide an example for each component. (3) 3. Explain the difference between Commercial insolvency and factual insolvency. (1) 4. Mention 4 indicators that could indicate whether or not the entity under audit is a going concern. (4) 5. ISA 560 - Subsequent Events, identifies two types of subsequent events. Distinguish between the two types of subsequent events, and indicate how each should be treated in the financial statements. (4) 6. During your "understanding of the entity and its environment" stage of planning for the audit of Nordic (Pty) Ltd, you obtained the following information, amongst other, about the company. (5) a) The company imports large quantities of stock. b) The products sold by Nordic (Pty) Ltd have expiry dates, after which they are not useable. c) Stock is stored in several warehouses across Namibia. d) Nordic has acquired numerous subsidiaries over the past 5 years. Under each acquisition goodwill was recognized and now shown on the Annual Financial Statements. e) 60% of the company's sales are for cash. YOU ARE REQUIRED TO: Indicate per item above what line item on the Annual Financial statements is affected as well as what assertion will be affected.

Answer rating: 100% (QA)

Your Name Your Title Date ABC Ltd Managing Directors Name Managing Director ABC Ltd Company Address Subject Internal Financial Controls Financial Risks and Disaster Recovery Plan Dear Managing Directo... View the full answer