You are a member of a social club in your neighborhood offering a range of facilities including snooker, for which a small charge is made, table tennis, television, reading rooms and a bar from which drinks can be purchased. The club is registered for VAT. The club has a full-time employee who is responsible for maintenance of the facilities and who also acts as bar steward. The treasurer of the club (who is not an accountant) is a friend of yours and persuaded you to accept the appointment as auditor at the last Annual General Meeting. The appointment carries a small fee. The year-end is 31st May but on 5th June 2020 you learn that the till rolls, the journal (containing details of daily takings and cash outgoings) and the club cashbook have been stolen from the treasurer’s car. You ascertain that the treasurer still holds all the bank statements, cheque books, an invoice file with vouchers supporting cheque and cash payments and membership records, and that the club’s professional bar stock-taker had carried out a physical stock count on 31st May 2020.

required:

a.Describe the steps you would take to assist the treasurer in preparing the accounts of the club on 31^st May 2020.

b.Briefly compare your responsibilities as auditor with those relating to the work of preparing the accounts (referred to in a above).

c.Show to what extent you believe your independence as auditor might be threatened because of

1.Your club membership

2.Your friendship with the treasurer, and

3.Your participation in the preparation of the accounts of the club on 31^st May 2020.

Answer rating: 100% (QA)

a In order to assist the treasurer in preparing the accounts of the club on 31st May 2020 the following steps should be taken Obtain all available rec... View the full answer