ComFirst Co Ltd produces computer software for specialists in the field on accounting and auditing. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
ComFirst Co Ltd produces computer software for specialists in the field on accounting and auditing. The company is a family and has been in operation for the last eight years. ComFirst has expanded quite rapidly due to its high-quality product and has invested more than Rs20m in its total assets. The company supplies its products to the local markets via some twenty retail outlets across the country. The company also markets its products on overseas market, but the distributors must operate under a specific licence renewed every three years. The cost of the licence depends on the expected sales in the country to which it relates. The licence fees receivables by the company is spread over the period of the licence. ComFirst prepares its financial statements on 30 June each year. On November 2017, ComFirst was listed on the Stock Exchange to get access to more capital. However, the family members have retained 30% of the shareholdings and the remaining shares have been issued to the public. As a listed company, ComFirst has already established an internal audit department but it is not operational as no one has yet been appointed as internal auditor. There is only one non- executive direct on the board. The management of the company is very much concern with these situations and seek to address them in the forthcoming months. As the audit manager of AB Associates, an audit firm, you have been assigned to the audit of ComFirst Co Ltd for the financial year 30 June 2018. You will do the audit of ComFirst for the first time as it is a new client of your firm. Required: (a) As the audit manager, discuss the matters that you would raise at the audit planning stage that would be useful for both the audit engagement and overall audit strategy. [10 marks] (b) Identify and evaluate the audit risks that should be considered in planning of ComFirst. [15 marks] ComFirst Co Ltd produces computer software for specialists in the field on accounting and auditing. The company is a family and has been in operation for the last eight years. ComFirst has expanded quite rapidly due to its high-quality product and has invested more than Rs20m in its total assets. The company supplies its products to the local markets via some twenty retail outlets across the country. The company also markets its products on overseas market, but the distributors must operate under a specific licence renewed every three years. The cost of the licence depends on the expected sales in the country to which it relates. The licence fees receivables by the company is spread over the period of the licence. ComFirst prepares its financial statements on 30 June each year. On November 2017, ComFirst was listed on the Stock Exchange to get access to more capital. However, the family members have retained 30% of the shareholdings and the remaining shares have been issued to the public. As a listed company, ComFirst has already established an internal audit department but it is not operational as no one has yet been appointed as internal auditor. There is only one non- executive direct on the board. The management of the company is very much concern with these situations and seek to address them in the forthcoming months. As the audit manager of AB Associates, an audit firm, you have been assigned to the audit of ComFirst Co Ltd for the financial year 30 June 2018. You will do the audit of ComFirst for the first time as it is a new client of your firm. Required: (a) As the audit manager, discuss the matters that you would raise at the audit planning stage that would be useful for both the audit engagement and overall audit strategy. [10 marks] (b) Identify and evaluate the audit risks that should be considered in planning of ComFirst. [15 marks]
Expert Answer:
Answer rating: 100% (QA)
a As a review supervisor followed matter will raise at arranging stage 1 Understanding the bookkeeping and inner control frameworks 2The evaluator should look to comprehend the bookkeeping arrangement... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Wilbern Ltd prepares financial statements to 30 June each year. On 1 March 2017, the company classifies a non-current asset as held for sale. The asset is eventually sold in July 2017. Calculate: (i)...
-
A city maintains an internal audit department and accounts for it in its general fund. In the coming year, the department will purchase $300,000 of computer and other ofce equipment, all of which...
-
ABC Company - Biographical Information ABC Company is a family owned business which Jonathan started 15 years ago, issuing 900 shares of the 1000 authorized, at a par value of $100 a share. ABC...
-
CFR is a manufacturer of Industrial machines. During 2020, CFR launched a new machine with model name Omega. Each unit of Omega is being sold for Rs. 10 million payable upon delivery. Revenue from...
-
What kinds of errors can Wally, Maria, and Ann make that are not captured by SAP? One example is that Wally might count 20 bottles and 30 cages but mistakenly enter 20 cages and 30 bottles. Describe...
-
a. Using the characteristics of Fig. 2.147b, determine ID and Vn for the circuit of Fig. 2.148. In Figure 2.148 b. Repeat part (a) with R = 0.47 k(l. c. Repeat part (a) with R = 0.18 kO. d. Is the...
-
Discuss the guidelines that project mangers can use to improve cash flow.
-
Santiago Manufacturing Company began operations on January 1. During the year, it started and completed 2,000 units of product. The company incurred the following costs. 1. Raw materials purchased...
-
Calculate the current-period financial statement items expressed as a percentage of the base amount for the last two years. In other words, use this relationship: Common-Size Percentage = (comparison...
-
Consider the novel device for oxidative treatment of wastewater shown in the figure (right column). In this device, O 3 will serve as the oxidant source, which must be carefully dosed into the...
-
The figure shows three identical, thin, long, perpendicular rods. The rods are numbered, each with a length of 100 and a mass of = 0.50 m. They are placed on the three axes 2. Connected to one of the...
-
Find the number of IR-active CO stretching modes for trans-[FeCl2(CO)4]. What's the determination of the reducible representation, perform the decomposition, and assign which vibrations are IR active.
-
For this assignment you will revisit the number guessing game in which the user picks a number from 1 to 100 and your program tries to guess the number. Here are some sample runs of the program if...
-
Write an application that simulates a calculator (see example opposite). Your calculator must: accept multiple operands and operators and performs multiple operations applying BEDMAS ensure that...
-
Credit Cards. Financial advisors will almost always tell you that you should pay for things in cash and avoid credit card debt. Further, they tell you that you should have a small emergency fund that...
-
On 1 April 2021, Silk Route Consultants acquired a new computer system from Gigabyte Systems, serial number 1380ARR796. The purchase order was 000935 and the payment was made by bank transfer. The...
-
For liquid water the isothermal compressibility is given by; where r and b are functions of temperature only. If 1 kg of water is compressed isothermally and reversibly from I to 500 bar at 60(C. how...
-
The Gallup Organization conducts an annual poll in which it asks a random sample of U.S. adults How would you rate the overall state of moral values in this country today: excellent, good, only fair,...
-
A simple random sample of size n = 12 is drawn from a population that is normally distributed. The sample mean is found to be x = 45, and the sample standard deviation is found to be s = 14....
-
Assume that the populations are normally distributed. (a) Test whether 1 2 at the a = 0.05 level of signicance for the given sample data. (b) Construct a 95% condence interval about 1 - 2....
-
A tapered circular bar is rigidly fixed at both the ends as shown in Fig. 13.45. If the temperature is raised by \(50^{\circ} \mathrm{C}\), calculate the stress in the bar. Take \(E=202...
-
A trapezoidal flat steel plate of thickness \(10 \mathrm{~mm}\) tapers uniformly from a width \(150 \mathrm{~mm}\) to \(100 \mathrm{~mm}\) in a length of \(500 \mathrm{~mm}\). Calculate the extension...
-
On the principal planes, the maximum stress is the (a) normal stress (b) shear stress (c) both normal and shear stress (d) either normal or shear stress
Study smarter with the SolutionInn App