15:34 B.' ' A we... . 46%. 6 AISQUESTION BAN... IQ 0+ 5 NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY \\8 ' FUCULTY OF COMMERCE .E N I I T DEPARTMENT OF ACCOUNTING CAC 4104 ACCOUNTING INFORMATION SYSTEMS \"Think in other Terms" pRAC'nCE QUESTIONS QUESTION 1 [25 Marks] You are an audit manager in Soko & Co, a rm of Chartered Certied Accountants. You have recently been made responsible for reviewing invoices raised to clients and for monitoring your rm's credit control procedures. Several matters came to light during your most recent review of client invoice les: Nhoro (Pvt) Ltd, a large private company, has not paid an invoice from Soko & Co dated 5 June 2013 for work in respect of the nancial statement audit for the year ended 28 February 213. A file note dated 30 November 2013, states that Nhoro (Pvt) Ltd is suffering poor cash flows and is unable to pay the balance. This is the only piece of information in the le you are reviewing relating to the invoice. You are aware that the nal audit work for the year ended 28 February 2014, which has not yet been invoiced, is nearly complete and the audit report is due to be issued imminently. Wallace (Pvt) Ltd, a private company whose business is the manufacture of industrial machinery, has paid all invoices relating to the recently completed audit planning for the year ended 31 May 2014. However, in the invoice le you notice an invoice received by your rm from Wallace (Pvt) Ltd. The invoice is addressed to Valerie Hobson, the manager responsible for the audit of Wallace (Pvt) Ltd. The invoice relates to the rental of an area in Wallace (Pvt) Ltd's empty warehouse, with the following comment handwritten on the invoice: 'rental space being used for storage of Ms Hobson's speedboat for six months - she is our auditor, so only charge a nominal sum of 3100'. When asked about the invoice, Valerie Hobson said that the invoice should have been sent to her private address. You are aware that Wallace (Pvt) Ltd sometimes uses the empty warehouse for rental income, though this is not the main trading income of the company. In the 'misceiianeous invoices raised\" le, an invoice dated last week has been raised to Software Supply (Pvt) Ltd, not a client of your firm. The comment box on the invoice contains the note 'Software Supply (Pvt) Ltd to several audit clients regarding the supply of bespoke accounting software\". Required: Identify and discuss the ethical and other professional issues raised by the invoice le review. and recommend what action, if any, Soko & Co should now take in respect of: NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY FUCULTY OF COMMERCE DEPARTMENT OF ACCOUNTING CAC 4104 ACCOUNTING INFORMATION SYSTEMS