Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Auditing Expert

Question 1

While assessing the risk of material misstatement and determining the appropriate response with regard to the inventory of Computing Solutions Limited (Computing Solutions) for the 30 June 2018 audit, you become aware of the following information:

(i) The best-selling computer presentation package has been experiencing a high level of returns owing to suspected software problems

(ii) Based on closing inventory, inventory turned over an average of 5.2 times in 2017 and 3.8 times in 2018

(iii) Computing Solutions moved its inventory from a central warehouse to six new regional warehouses in March 2017

(iv) Inventory on hand at end of year represented 22 per cent of sales in 2018 and 18 per cent of sales in 2014

(v) Computing Solutions has recently won a tender to supply a large government department with various products. In order to win the tender and prevent competitors from gaining a foothold in the public sector market, Computing Solutions agreed to supply the items at 10 per cent below their cost price. The first shipment is due to be delivered to the government department in the middle of July 2018.

REQUIRED

(a) Identify and explain the two key assertions at risk in relation to inventory

(b) Identify and describe two substantive audit procedures that you could perform in response to each risk identified above

(c) Explain the requirement of ASA 701 Communicating Key Audit Matters in the Auditor's Report and the rationale for this auditing standard.

Determine if the above matters are key audit matters, providing full rationale for the determination. If it is determined that they are Key Audit Matters, provide the disclosures which are required in Key Audit Matters Section of the Auditor's report as required under ASA 701.

Question 2

You are the audit senior with Howard & Associates and have been assigned to the audit of Beautiful Hair Ltd (Beautiful Hair).

In early 2018, Beautiful Hair acquired a small manufacturer of high-quality organic hair-styling products, Shimmer Pty Ltd (Shimmer). Beautiful Hair's management had identified that Shimmer's line of products would fit extremely well with the Beautiful Hair business, and organized funding for the acquisition from Regional Bank.

Shimmer uses special formulas to create its product. Only the owner of Shimmer knows the secret ingredients for the formulas. These secret ingredients are apparently documented and held by Shimmer's solicitors.

Beautiful Hair's management has been advised that the intellectual property related to the formulas has the potential to be both a material and valuable asset and has been recognized as an intangible asset arising from the acquisition in accordance with accounting standard AASB 3.

REQUIRED
(a) Identify and explain the two key assertions most at risk in relation to the intellectual property intangible asset

(b) Identify and describe a substantive audit procedure that you could perform in response to each risk identified above

(c) Explain the requirement of ASA 701 Communicating Key Audit Matters in the Auditor's Report and the rationale for this auditing standard. Determine if the above matters are key audit matters, providing full rationale for the determination. If it is determined that they are Key Audit Matters, provide the disclosures which are required in Key Audit Matters Section of the Auditor's report as required under ASA 701.

Requirement: Using reference materials available on the internet, research the topic and prepare a report, fully referenced

Auditing, Accounting

  • Category:- Auditing
  • Reference No.:- M93092282
  • Price:- $30

Priced at Now at $30, Verified Solution

Have any Question? 


Related Questions in Auditing

Case - report assignment -background - you are a manager in

Case - Report Assignment - Background - You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm with offices throughout the major regional centres of NSW and Queensland. Although a mediu ...

Question 1while assessing the risk of material misstatement

Question 1 While assessing the risk of material misstatement and determining the appropriate response with regard to the inventory of Computing Solutions Limited (Computing Solutions) for the 30 June 2018 audit, you beco ...

Topic how is enhanced auditor reporting being embraced in

Topic: How is Enhanced Auditor Reporting being embraced in Australia? Research Assessment: Download an annual report of an ASX listed company that is in the S&P/ASX 300 list. Review all the sections within the selected c ...

Audit assurance and compliance assignment -topic how is

Audit, Assurance and Compliance Assignment - Topic: How is Enhanced Auditor Reporting being embraced in Australia? Background and Context: Since 2016, there has been a strong push to improve the quality of audit reportin ...

Question -1 before accepting the audit engagement the

Question - 1. Before accepting the audit engagement, the auditor has evaluated the client management. Why is this so? 2. At present there is no legal definition of the term "accountant" as a result, any person or firm ca ...

Auditing assignment -learning outcomes - explain and apply

Auditing Assignment - Learning Outcomes - Explain and apply the principles, practice and process of auditing to practical situations. Research, critique, interpret and communicate current and future auditing issues to sp ...

Audit assurance and compliance assignment -topic how is

Audit, Assurance and Compliance Assignment - Topic: How is Enhanced Auditor Reporting being embraced in Australia? Research Assessment: Download an annual report of an ASX listed company that is in the S&P/ASX 300 list. ...

Yancoal australia ltdassume you are the audit senior

Yancoal Australia Ltd Assume you are the audit senior assigned to the audit of Yancoal Australia Ltd., a public listed company, for the year ended 30 June 2018. As an audit senior, you have been assigned the task of gain ...

Audit assurance and compliance assignment -topic how is

Audit, Assurance and Compliance Assignment - Topic: How is Enhanced Auditor Reporting being embraced in Australia? Background and Context: Since 2016, there has been a strong push to improve the quality of audit reportin ...

Assignment total quality management -question 1 -a a

Assignment total quality management - QUESTION 1 - A. A defense contractor, manufacturers rifles for the military. The military has exerting quality standards that the contractor must meet. The military is very much plea ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As