ACCA P7 Advanced Audit and Assurance Kit by BPP Learning Media

By BPP Learning Media

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Extra info for ACCA P7 Advanced Audit and Assurance Kit

Sample text

Ryder & Co has recently recruited a new audit junior, Sam Tyler, who has come across several issues in his first few months at the firm which he would like your guidance on. Sam’s comments and questions are shown below: I know that auditors are required to assess risks of material misstatement by developing an understanding of the business risks of an audit client, but I am not clear on the relationship between business risk and risk of material misstatement. Can you explain the two types of risk, and how identifying business risk relates to risk of material misstatement?

2 million when it was purchased in September 20W9 and was being depreciated on a straight-line basis over 20 years. The minutes of the board meeting at which the sale was approved record that Aspersion's finance director, Iain Jolteon, has a 30% equity interest in Abra. (7 marks) (b) As well as cargo carriers, Aspersion owns two light aircraft which were purchased in 20X5 to provide business passenger flights to a small island under a three year service contract. It is now known that the contract will not be renewed when it expires at the end of March 20X9.

Com Required Identify and explain the professional and ethical matters that should be considered in deciding whether to accept the appointment as auditor of Wexford Ltd. (10 marks) (b) Wexford Ltd's financial statements for the year ended 31 July 20X0 included the following balances. co m The inventory comprised stocks of books, diaries, calendars and greetings cards. Required In relation to opening balances where the financial statements for the prior period were not audited: ial Note. Assume it is 7 June 20X1.

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