Section B - ALL FIVE questions are compulsory and MUST be attempted 1. For the audit of Helium Lid, the audit team has decided to use non-statistical sampling in the test of controls and the substantive tests of sales transactions. The associate on the audit team selected a random sample of 100 sales invoices from the 5,000 generated during the year and examined them for exceptions. She notes the following as exceptions in her audit schedule. There is no other documentation Invoice Comment No. 5028 Sales invoice amount was incorrect because an incorrect product number was entered 7364 Sales invoice for $287.500 has not been collected and is 6 months past doe. 7625 Client unable to locate the sales invoice Invoice was dated 3 days later than the date entered in sales journal 8528 Client was unable to locate the customer order, although the invoice has been paid Customer was not included in the approved mater file, but the sale was for only $4,765 8431 9169 Required As the audit senior on Helium Ltd, determine whether each of the above would be defined as an exception or not and why? (6 marks) Note - Set up your answer as a table with one column labeled "Invoice Number", another "Exception - Yes or No?" and another column "Rationale": 2. During the audit of COVID Ltd, you identified the following misstatements in the sales and collection cycle: 1. In several instances cash receipts were posted to the incorrect customer accounts. 2. Several accounts receivable balances in the master file were not included in the aged trial balance. 3. A shipment made in the subsequent period is recorded as a current period sale. 4. Several accounts receivable balances are in dispute as a result of claims of defective merchandise 5. Goods were returned for credit on the last day of the fiscal year, but the sales return was not recorded until the following fiscal year. 6. An account receivable balance in the master file is included twice on the aged trial balance Required As auditor, identify one test of details of balances audit procedure you would use to detect each misstatement? (6 marks 3. You are an auditor with Chambers and Arnold and involved in the audit of the financial statements of a manufacturing company with a significant amount of trade account receivable. You are satisfied that the accounts are correctly summarized and classified, and that allocations, reclassifications and valuations are made in accordance with IFRS. You are planning to use accounts receivable confirmation requests to obtain sufficient, appropriate evidence as to trade accounts receivable. Required As auditor what steps would you perform if there is no response to your second request for a positive confirmation? (6 marks) 4. You are the audit senior in charge of the audit of inventory for Corona Ltd, a tablet retail chain in Montego Bay. To ensure tablets are quickly delivered to stores, the company operates two warehouses in Spanish Town and Mandeville. Today you and your team are observing the inventory count at Spanish Town. Required a) There was a flu outbreak in Spanish Town and half the warehouse staff call in sick. The manager of the warehouse has requested you and your staff to assist in the stock-taking process. Explain whether you and your staff should help or not. (3 marks) b) You find twelve obsolete tablets during the count. State what you should do? (3 marks) 5. (a) You are responsible for planning the audit of PP&E as the senior on the Mustang Ltd audit engagement for year ended 31 December 2019. Describe substantive audit procedures the junior team member should perform to obtain sufficient and appropriate audit evident for current year acquisitions. (3 marks) 5. (b) Equipment on hand which is no longer used in operations but which the auditor has physically verified as being in existence does not need to be evaluated for potential impairment Discuss whether this statement is correct or not