lOMoAR cPSD| 32110785
, COLLEGE OF ACCOUNTING SCIENCES
DEPARTMENT OF AUDITING
TEST 1: 24 APRIL 2024
AUE3761
THE AUDIT PROCESS
(40 marks)
2 hours (including 15 minutes to download and 30 minutes to upload)
THIS PAPER CONSISTS OF SEVEN (7) PAGES.
IMPORTANT INSTRUCTIONS:
1. This is a closed-book test.
2. This paper consists of a case study and five (5) questions.
3. All questions and subsections must be answered.
4. Each question must be started on a new (separate) page.
Honesty declaration:
By submitting my solution to the test, I declare that
• I know what plagiarism is, acknowledge that it is wrong and realise
that disciplinary steps may be taken against me if I am found guilty of
plagiarism • this solution, submitted by myself, is my own work
• I have not assisted any other student in any manner, nor have I
received the assistance of any other person in completing this test
• I know that if I am found to be in violation of this declaration, I will
receive 0% for this test
, lOMoAR cPSD| 32110785
Note: You do not have to sign this declaration since by submitting your
solution, you automatically declare that you adhere to all the above with
regard to this specific assessment.
FURTHER INSTRUCTIONS:
1. Refer to Test 1 communication on myUnisa or myExams which
provides more detail about the 2024 Test 1.
This paper deals with the following main topics:
REQUIRED MAIN TOPIC MARKS
1. Statutory concerns 6
2. Risks of material misstatement at the financial statement level
11
3. Risks of material misstatement at the assertion level 7
4. Overall audit strategy 10
5. Ethical concerns 6
40
[THE CASE STUDY FOLLOWS ON THE NEXT PAGE.]
, CASE STUDY 40 marks
READ THE "REQUIRED" PART ON PAGE 7 BEFORE YOU
CONTINUE.
BACKGROUND INFORMATION
You are a trainee accountant at SBG Incorporated (SBG) in Gauteng, a
registered firm of auditors. SBG has offices all over the country and is
responsible for the audit of BuyRite Holdings Limited (BRH) and its
subsidiaries’ financial statements for the financial year ended 28 February
2023. BRH is an investment holdings company listed on the Johannesburg
Stock Exchange (JSE Limited) in the food retailers and wholesalers sector and
it has been a client of SBG for the past five financial years. The following are
the subsidiaries in the BRH Group, all of which trade with one another at
normal market prices:
• BuyRite Retail (Pty) Ltd (BR Retail). It offers a broad range of retail
products to customers in supermarkets in South Africa.
• BuyRite Retail Non-RSA (Pty) Ltd. It offers a broad range of retail
products to customers in supermarkets outside of South Africa.
BRH and its subsidiaries prepare their financial statements in South African
rand, in accordance with International Financial Reporting Standards (IFRS),
on the basis that it will continue as a going concern for the foreseeable future.
Stores that form part of each subsidiary are not franchised and therefore not
individually managed; they must comply with all decisions, internal controls
and quality requirements as set out by management.
You are part of the audit team responsible for the audit of BR Retail at their
head office in Gauteng. Mr Marole oversees the audit and he has been the
engagement partner on BR Retail’s audit since SBG was appointed as their
auditors. Mrs Martin, who is also a CA(SA), has recently joined SBG as a
partner and has shown some interest in being appointed as the engagement
, COLLEGE OF ACCOUNTING SCIENCES
DEPARTMENT OF AUDITING
TEST 1: 24 APRIL 2024
AUE3761
THE AUDIT PROCESS
(40 marks)
2 hours (including 15 minutes to download and 30 minutes to upload)
THIS PAPER CONSISTS OF SEVEN (7) PAGES.
IMPORTANT INSTRUCTIONS:
1. This is a closed-book test.
2. This paper consists of a case study and five (5) questions.
3. All questions and subsections must be answered.
4. Each question must be started on a new (separate) page.
Honesty declaration:
By submitting my solution to the test, I declare that
• I know what plagiarism is, acknowledge that it is wrong and realise
that disciplinary steps may be taken against me if I am found guilty of
plagiarism • this solution, submitted by myself, is my own work
• I have not assisted any other student in any manner, nor have I
received the assistance of any other person in completing this test
• I know that if I am found to be in violation of this declaration, I will
receive 0% for this test
, lOMoAR cPSD| 32110785
Note: You do not have to sign this declaration since by submitting your
solution, you automatically declare that you adhere to all the above with
regard to this specific assessment.
FURTHER INSTRUCTIONS:
1. Refer to Test 1 communication on myUnisa or myExams which
provides more detail about the 2024 Test 1.
This paper deals with the following main topics:
REQUIRED MAIN TOPIC MARKS
1. Statutory concerns 6
2. Risks of material misstatement at the financial statement level
11
3. Risks of material misstatement at the assertion level 7
4. Overall audit strategy 10
5. Ethical concerns 6
40
[THE CASE STUDY FOLLOWS ON THE NEXT PAGE.]
, CASE STUDY 40 marks
READ THE "REQUIRED" PART ON PAGE 7 BEFORE YOU
CONTINUE.
BACKGROUND INFORMATION
You are a trainee accountant at SBG Incorporated (SBG) in Gauteng, a
registered firm of auditors. SBG has offices all over the country and is
responsible for the audit of BuyRite Holdings Limited (BRH) and its
subsidiaries’ financial statements for the financial year ended 28 February
2023. BRH is an investment holdings company listed on the Johannesburg
Stock Exchange (JSE Limited) in the food retailers and wholesalers sector and
it has been a client of SBG for the past five financial years. The following are
the subsidiaries in the BRH Group, all of which trade with one another at
normal market prices:
• BuyRite Retail (Pty) Ltd (BR Retail). It offers a broad range of retail
products to customers in supermarkets in South Africa.
• BuyRite Retail Non-RSA (Pty) Ltd. It offers a broad range of retail
products to customers in supermarkets outside of South Africa.
BRH and its subsidiaries prepare their financial statements in South African
rand, in accordance with International Financial Reporting Standards (IFRS),
on the basis that it will continue as a going concern for the foreseeable future.
Stores that form part of each subsidiary are not franchised and therefore not
individually managed; they must comply with all decisions, internal controls
and quality requirements as set out by management.
You are part of the audit team responsible for the audit of BR Retail at their
head office in Gauteng. Mr Marole oversees the audit and he has been the
engagement partner on BR Retail’s audit since SBG was appointed as their
auditors. Mrs Martin, who is also a CA(SA), has recently joined SBG as a
partner and has shown some interest in being appointed as the engagement
