Roof and Walls is a charity that provides accommodation for people who are in hardship or from
Question:
Roof and Walls is a charity that provides accommodation for people who are in hardship or from disadvantaged backgrounds. The constitution of Roof and Walls stipulates how funds can be spent.
Revenue to cover this expenditure comes from a variety of sources, including:
• limited government grants
• legacies and donations received either by EFT into the charity's account or cheques received in the mail
• cash collected by volunteers from the public
• fundraising events, such as charity auctions and a summer ball.
The amounts of the legacies and donations received can range from a few dollars to several thousands of dollars. In some instances the legacies and donations are required to be spent on specific projects, or are received on the basis that the funds are invested and the income is used for a specific purpose.
The government grants are for specific projects, in some cases for the purchase of specific assets.
Required
Identify the inherent risk in relation to revenue for Roof and Walls and indicate the impact on your audit approach.
Step by Step Answer:
Modern Auditing And Assurance Services
ISBN: 9781118615249
6th Edition
Authors: Philomena Leung, Paul Coram, Barry J. Cooper, Peter Richardson