QUESTION 1 (20 marks) You are required to indicate whether the statement (1.1 - 1.4) is true or false and briefly explain your answer: 1.1 1.2 In order to detect the "rolling" of deposits, it is important to prepare and analyse interbank transfers. (2) 1.3 1.4 1.5 You are required to answer the following: Identify and explain the two types of external confirmations that are available to the auditor. (6) 1.6 The auditor's attendance of the wage pay-out primarily provides audit evidence about the (2) completeness of wages. 1.7 1.8 When auditing a bank or creditors reconciliation, among other things, the significant reconciling items must be audited to establish that their inclusion in the reconciliation (i) is appropriate, and (ii) that they are reflected in the correct amount. (2) Debtors confirmations must be performed for every audit. (2) Explain how the auditor can obtain evidence about the completeness of inventory by performing "test counts". (2) Describe two benefits to an auditor of using CAATS on an audit where it is both possible and preferable to use CAATS. (2) Provide a brief explanation of how CAATS can be used during the "gathering of audi evidence" phase of an audit where a substantive audit approach is followed. (2)

QUESTION 1 (20 marks) You are required to indicate whether the statement (1.11.4) is true or false and briefly explain your answer: 1.1 The auditor's attendance of the wage pay-out primanily provides audt evidence about the completeness of wages: (2) 1.2 In order to detect the "rolling" of deposits, it is important to prepare and analyse interbank transfers. 1.3 When auditing a bank or creditors reconciliation, among other things, the significant reconciling items must be audited to establish that their inclusion in the reconcliation (i) is appropriate, and (ii) that they are reflected in the correct amount. (2) 1.4 Debtors confirmations must be performed for every audit. You are required to answer the following: 1.5 Identify and explain the two types of external confirmations that are avaliable to the auditor. (6) 1.6 Explain how the auditor can obtain evidence about the completeness of inventory by performing "test counts". (2) 1.7 Describe two benefits to an auditor of using CAATs on an audit where it is both possible and preferable to use CAATs. (2) 1.8 Provide a brief explanation of how CAATs can be used during the "gathering of audi evidence" phase of an audit where a substantive audit approach is followed