You are a senior audit clerk at KNK Inc. and are currently busy with the finalisation of the audit of Steinlief (Pty) Ltd. The audit manager has brought a first year audit clerk to the team to assist in the finalisation of the audit. Part of your duties as a senior is to mentor junior staff and assist them with their work related queries to enable them to perform their tasks.

You are currently busy with the audit procedures of the inventory & production cycle, specifically evaluating the work of the costing expert used by the client’s management to value its inventory in terms of the standard costing model.

a. Name the requirements of working papers that the first year audit clerk must apply when setting up working papers for the audit file.

b. Describe the advantages (value) of working papers for auditors to the first year audit clerk.

c. List the steps in the completion phase of the audit to enable the first year audit clerk to complete their tasks efficiently.

d. Explain to the first year audit clerk, the hierarchy of the importance of audit evidence (Reliability).

Your answer should be discussed under the following headings:

i. Source of audit evidence obtained
ii. Nature of audit evidence obtained.

e. List the auditor’s procedures to rely on the work of the costing expert used by management.

f. Explain to the first year audit clerk the considerations affecting the nature, timing and extent of the auditor’s procedures required to rely on the work of the costing expert.

Answer rating: 100% (QA)

1 Name the requirements of working papers that the first year audit clerk must apply when setting up working papers for the audit file The audit working papers should be prepared in such a way that it ... View the full answer