QUESTION 1 Identify and explain any four financial statement assertions relevant to classes of transactions and events for the year under audit; and for each identified assertion describe a substantive procedure relevant to the audit of revenue. (2 marks) Hazogo Enterprises Co (Hazogo) manufactures and distributes fashion clothing to retail stores. Its year ends on 31 March. You are the audit manager responsible for auditing Hazogo and the year-end audit for the year ended 31st March 2019 is due to commence. The following three matters have been brought to your attention: (a) (b) (1) (11) (iii) Supplier statement reconciliations Hazogo receives monthly statements from its main suppliers and although these have been retained, none have been reconciled to the payables ledger as at 31 March 2019. The engagement partner has asked the audit senior to recommend the procedures to be performed on supplier statements. Bank reconciliation During last year's audit of Hazogo's bank and cash accounts, significant cut off errors were discovered with a number of post year-end cheques being processed prior to the year end to reduce payables. The finance director has assured the audit engagement partner that this error has not occurred again this year and that the bank reconciliation has been carefully prepared. The audit engagement partner has directed the bank reconciliation to be comprehensively audited, Receivables Hazogo's receivables ledger has increased considerably during the year, where the year-end balance is TZS.230 million compared to TZS.140 million last year. The finance director of Hazogo has requested you to no carry out that a receivables circularization as a number of theircustomers complained about the inconvenience involved in responding when the exercise was carried out last year. The engagement partner has agreed to this request, and tasked you with identifying alternative procedures to confirm the existence and valuation of receivables. REQUIRED: Describe substantive procedures you would perform to obtain sufficient and appropriate audit evidence in relation to each of the above three matters. (8 marks)

(y) 7 IION:1 (2) markst (1) Supplier statement macminiugions Hampo receiva monthly atabencrer finm ite main appliern and alibeugh these have bect ntained, noer hine bem nocunciled bo fhe paybible icdiger as reciemsend the procentiner to he pertsormed so andplirr atitements (ii) Repk reconciliaticus ud enors mete dikeswsod with a namer of poit year-end cheues being ycar and that the hank mectancisisioe tar beten carffaly propured. The audit engegement pothe has diuctied te hes fecongeiliation to he compreheneively aritied. (ini) Heceivabies Hanogo's receivallen iedfer has increasal eoesideribly quinge the rear, where out las your. The empactioen panser hat agted to thin request, and tavked you widh identifying altemative pocotates fo contirnt the existence and salathoti of receigakice REQUITED: (f marks) QUESTHONA (2) isiaria) (i) Suppiste staterocht tedencikicions. these hame bece retained none hase bese rogencilad to the porabiev lodere an processed priie to ahe year ent as redace pyabiles. The firiance directer has yenir and tha the hark regonelliation han been cascfully preporod. The autit engagerenent pether has firocted the karl teconcination is be compechengisely aridited. (iii) Receivables Hanogs's recervahies iedper hat incrand coowiderubly during the yoar, where year, The finance dircetur of linegs tan nequested yea to no garty out that if receivalien cincutarieation as a mamber of itheircustemers complaithed athour the incenvmience imvohied ie raponding when the cocrtise veas carricd ou lait year. The engrapoment partece las agroed so this requeat, and tesked. you with identifying allematite posebunes to coctimm the ekistence and valuation of rocervables RFQUIRED: Desribe substaraive fmocedires yoy sould periorte to cocain safficioni and appropziate atidif evidence in rclation so eacts of the above three matters. (8 marlis)