Question 1

a) You are the audit manager responsible for the audit of Fiver Sdn Bhd for the year ending 31

October 20X0.

Requirements

Outline the actions you would take in relation to junior members of the audit team, before and

during the audit fieldwork, to ensure the quality of their work will be of a high standard.

b) Your firm has accepted a non-audit engagement to perform a review of Bigwig Sdn Bhd's financial

statements.

Requirement

List the matters that your firm should include in the engagement letter in respect of this

engagement.

c) You are working on the external audit of Keehar Sdn Bhd (Keehar) for the year ended 31 August

20X0. Using data provided by Keehar, your firm's data analytics software has produced the

following data visualisation relating to payroll costs. The visualisation shows the average gross

salary per month and deductions as a percentage of gross salary.

The following events occurred in the year:

December 20W9 - Keehar made a number of employees redundant

May 20X0 - Keehar replaced its payroll software

Requirement

Using the information provided, list the questions you would ask the management of Keehar.

d) On 18 August 20X0, your firm was appointed as the external auditor of Lapine Sdn Bhd (Lapine) for

the year ended 30 June 20X0. Consequently, it did not attend the year-end inventory count.

No other procedures could be performed during the audit to obtain sufficient evidence in

respect of the existence of inventory at 30 June 20X0.

Requirement

The directors of Lapine have included closing inventory of RM1.9 million in the financial

statements at 30 June 20X0. Lapine's profit before tax for the period is RM14.8 million.

State, with reasons, the implications for the auditor's opinion on the financial statements for the

year ended 30 June 20X0.