$1\mathrm{.}1.$ Briefly explain why auditors are interested in the going concern ability of a company?

$1\mathrm{.}2$ Where a company is required to disclose a going concern problem in its notes, what information should

the note contain?

$1\mathrm{.}3.$ In terms of ISA $570($Revised$)-$ Going Concern, the adoption of the going concern basis of accounting in

the preparation of the annual financial statements means $...?$

$1\mathrm{.}4.$ If a material uncertainty exists relating to the company's ability to continue as a going concern, can the

going concern basis for the preparation of the Annual Financial Statements be adopted? Explain.

$1\mathrm{.}5.$ Is going concern an assertion? Discuss.

$1\mathrm{.}6.$ What are the objectives of the auditor when conducting audit procedures relating to the going concern

assumption?

$1\mathrm{.}7.$ If management $($the directors$)$ have already performed an assessment of their company's going concern

ability, is it necessary for the auditor to perform an assessment of going concern? Justify.

QUESTION $2$

$(20$ Marks$)$

$2\mathrm{.}1.$ You are the audit senior of Blair & $Co$ and your team has just completed the interim audit of Chuck

industries $Co,$ whose year$-$end is $30$ June $2023.$ You are in the process of reviewing the systems testing

completed on the payroll cycle, as well as preparing the audit programmes for the final audit. Chuck

Industries Co manufactures lights and the manufacturing process is predominantly automated; however,

there is a workforce of $85$ employees, who monitor the machines, as well as approximately $50$ employees

who work in sales and administration. The company manufactures $24$ hours a day seven days a week.

Chuck Industries is considering establishing an internal audit $($IA$)$ department next year. The finance director

has asked whether the work performed by the IA department can be relied upon by Blair & Co$.$

Required:

Explain the factors that should be considered by an external auditor before reliance can be placed on the

work performed by a company's internal audit department.

$2\mathrm{.}2.$ What factors should a group engagement partner consider before placing reliance on component

auditor?

$2\mathrm{.}3.$ List and briefly explain the three pillars on which internal audit is centred on$?$

$2\mathrm{.}4.$ Described the objectivity of internal auditors within an organisation?

QUESTION $3$

$3\mathrm{.}1.$ Identify the business risks related to the order, warehousing and invoicing functions of the revenue and

receipts cycle?

$3\mathrm{.}2.$ The functions in a typical wholesaling company which sells on credit may be described as follows:

Order department

Recording of sales

Warehouse

Receipts mailroom$/$cashier

Despatch

Recording of receipts

Invoicing