1. Client is a retail company that sells merchandise in the form of apparel to end users. The auditor will test internal control at many client outlets. In using the internal control test for the client's business outlets, the auditor uses a random sample / probability to check the internal control of the client company. The company has 100 outlets or stores that distribute its merchandise to consumers. From 100 outlets. The auditors took samples from 10 outlets and found no deviation from the 10 outlets examined. Based on the results of the sample test, the auditor concludes that the client's internal control has been running effectively. In fact, there are many outlets out of these 100 outlets with poor internal control, such as: frequent theft by outlet employees, and surveillance or CCTV cameras that often turn off, and computerized systems that often experience disruption during operating hours, but incidentally the problematic outlet is not picked up. in the sample.

Question:

a. What are the risks associated with the cases mentioned above? Be specific about your answer!

b. What audit objectives are in this case? Explain your answer!

2. You are a financial auditor who works in a public accounting firm. You are assigned by your partner to audit the client. This client is listed on a stock exchange using IFRS as accounting standards. The client in the previous year had an excess amount of cash that was not used for business development. Client management invests the excess cash in investment in securities, namely in shares of other companies that have also gone public:

Question:

a. In your opinion, in that case the client has presented fairly or was there a finding of misstatement? Explain your answer!

b. Describe the audit objectives and audit procedures contained in that case!

In the current financial year that you are auditing, the client has a material amount of investment in securities. At the end of the period, the value of shares owned by clients has decreased. Dropped far below the share purchase price. The client does not include the decrease in the income statement as part of comprehensive losses, after profit for the year. When an inquiry was made with client management, they said that the decline in value was due to the pandemic outbreak, and after the pandemic outbreak ended, it was assumed that the stock value would rise again. The client also said that the investment held in shares is for long-term purposes, and there are no plans to turn it into cash in the near future.