1. Your firm has recently been appointed Auditor of Crush Manufacturing Ltd Crush Manufacturing Ltd is quoted on the Zimbabwe Stock Exchange and the Directors own less than 4 of the company shares You have been asked by the senior in charge of the audit to carry out work in relation to Directors transactions with the company which are required to be disclosed in the company's annual financial statements 
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3. Required
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5. a. Evaluate the rationale behind the work you would carry out to check if the company has made any loans or quasi-loans to a Director or a Shadow Director or entered into any guarantees in connection with a loan to a Director or a Shadow Director and consider why this work is of particular importance in the current climate.
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7. b. Justify why it is important for Auditors to check if there are any I Directors service agreements with the company ii Options granted by the company to enable Directors to purchase shares in the company at a fixed price at a future date and how should this work be carried out.
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9. c Analyse the investigations you would carry out to determine whether any Director has had a material interest in a contract with the company other than those described in part b above.
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11. d Assume that the work you would carry out reveals that Crush Manufacturing Ltd had purchased all the shares in Tiktok Enterprises for 2 000 000 One of the Directors of Crush Manufacturing Ltd owned 50 of the shares of Tiktok Enterprises How should you proceed on foot of this discovery Justify your answer.

Answer rating: 100% (QA)

a It is important for auditors to carry out work in relation to directors transactions with the company in order to ensure that any loans guarantees o... View the full answer