AUI2601 ASSIGNMENT 2 SEMESTER 1 2023

AUI2601 ASSIGNMENT 2 SEMESTER 1 2023 () 100% TRUSTED workings, explanations and solutions. For assistance call or us on . REQUIRED MARKS Q1. With reference to the “background” information: 1.1 State whether the appointment of SSSA as auditors of ASM complies with Section 91 of the Companies Act. Describe in your answer the procedures that should have been followed to ensure compliance with the Companies Act. (5) 1.2 Explain why ASM needs to have their financial statements audited. (1½) Q2. With reference to the information under “identifying and assessing the risk of material misstatement”: Client: Adam Sugar Manufacturers Ltd (ASM) Year-end 31/03/2023 WP reference D100 page 1 of 1 Prepared by: Audit senior Date prepared: 1/4/2023 Reviewed by: Date reviewed: Subject: Inventory balance in the statement of financial position: R Audit objective: To obtain sufficient/appropriate audit evidence to support the amount of R Audit conclusions: 1. Completeness: Only completed manufactured sugar and related products are included in the figure of R. 2. Validity: Only saleable inventory is included. Any inventory which has expired because of deterioration (i.e. it is invalid) is excluded from the amount of R. 3. Existence: The inventory which is included in the amount of R actually existed at the reporting date. 2.1 Provide a reason why each identified risk indicator in (a) to (d) can be regarded to increase the risk of material misstatement. (6) 2.2. Based on the identified risks in (a) to (d), the inherent risk for the engagement was classified as high. Explain what you anticipate the control risk for the engagement to be classified as based on the information provided relating to the internal controls. (3) Q3. With reference to the information under “assertions, audit procedures and audit evidence”: 3.1 Evaluate with reasons if the assertions relating to inventory, documented in the working paper (1 to 3), are correct or not. (7½) Q4. With reference to the “SAICA Code of Professional Conduct”, information pertaining to other SSSA clients in matters 1 and 2: 4.1 Identify one type of threat (there could be more than one) for each of the matters 1 and 2. (3) 4.2 Explain why it is a threat in terms of the Code of Conduct. (3) 4.3 Identify the fundamental principles affected in terms of the Code of Conduct for each of the matters 1 and 2. (3) 4.4 For each identified threat, list a possible safeguard to eliminate or reduce the threat to an acceptable level. (3) Present your answer in the following format. Matter 1 4.1 Type of threats: 4.2 Reason: 4.3 Fundamental principles: 4.4 Safeguard: Matter 2 4.1 Type of threats: 4.2 Reason: 4.3 Fundamental principles: 4.4 Safeguard