Auditing

Sorry that i posted twice

Question I CHOPPIES CASE Local retailer Choppies Limited continues to be under pressure following wecks of negative pablicity and subsequent failure to release financial results within the stipulated time. Since the beginning of the year, the share price of the retailer's stock at Botswana Stock. Exchange (BSE) has fallen by 30.2 percent. Available figures shows that the sharpest monthly decline in share price was register in August wben the price fell by 26.4 percent. On Thursday the Botswana Stock. Exchange Limited (BSEL) and Johannesburg Stock Exchange (JSE) halted the trading of Choppies Enterprises on the stock market, only for the two bourses to rescind within hours. Following the trading halt, Choppies quickly issued a trading statement and cautionary note, clarifying its Friday announcement. The Ramachandran Ontapathu led grocer said the delay in publication of results is dae to the current audit for the year ended June 2018. The grocer appointed a new auditor carlict this year after parting ways with K.MMG, its long time auditoc. The company says the board and auditors practices and policies. "The reassessments currently being undertaken relate to historical purchase price allocations on business acquisitions, depreciation and amostization accounting. valuation of inventory and impsiment assessments of property, plant and cquipment, intangible assets and deferred tax assets," the company said in the new statement. Choppies explained that the reassessments which are currently. ongoing are complex by nature, requiring careful analysis in order to determine the impact on prior and current periods. Furthermore, the retailer says its board of directors and its new auditors, PricewaterhouseCoopers (PWC), have uncovered number of matters relating to the current and earlict financial periods, which requife independent made. "Certain transactions and business relationships hitherto were not made fully apparent and were therefore not sufficiently considered in preparation of historical annual financial statements," read part of the statement. The transactions and relationships referred to include certain business acquisition transactions undertaken by South African subsidiary during the 2017 and 2018 financial years. Also part of the scrutiny is the ramifications of the "well published sharcholder dispute in Zimbabve." Choppies went on to say that while these independent verifications and expert legal analyses have been initiated, their completion date and outcomes cannot be determined with any reasonable certainty at this stagc, hence impacting the finalization or me couprany s suunour inancial results, company said in the new statement. Choppies explained that the reassessments which are currently ongoing are complex by nature, requiring careful analysis in order to determine the impact on prior and current periods, Furthermore, the retailer says its boand of directors and its new auditors, PricewaterhouseCoopers (PWC). have uncovered number of matters relating to the current and earlier financial periods, which require independent verification and expert legal analysis before disclosures can be made. "Certain transactions and business relationships hitherto were not made fully apparent and were therefore not sufficiently considered in preparation of historical anmual fintancial statements," read part of the statement. The transactions and relationships referred to include certain business acquisition transactions undertaken by South African subsidiary during the 2017 and 2018 financial years. Also part of the serutiny is the ramifications of the "well published stareholder dispute in Zimbabwe." Choppies went on to say that while these independent verifications and expert legal analyses have been initiated, their completion date and outcomes cannot be determined with any reasonable certainty at this stage, hence impacting the finalization of the company's audited financial results, which are a month behind schedule. On the issue of anticipated profit drop, the retailer says a combination of adverse trading conditions in South Africa, Mozambique and East Afriea, as well as inventory losses will most likely affect the bottom line. "The final results for the current financial year may be further impacted by possible restatements on prior periods and accounting for transactions still being verified. As set above, the Group is not in a position to make any reasonable estimate of the impact of these matters (if any). until the necessary verifications. analyses and assessments are completed," the company said. The Friday announcement that alladed to the potential 20 percent drop in profits, together with dispute about its shareholding structure in Zimbabwe, has rubbed off shareholders, sending the company's stock on the JSE, to drop by as much as 85 percent on Tuestay, while on the BSE the shares fell by 72 percent. Listed on the JSE in 2015 at R4.90, the shares were trading at 0.42 cents by Tharday, a 91 percent drop. In Botswana, the company listed at Pl 25 , and is currently trading at P0.40. Question 1 (20 Marks) a. Discuss the unethical practices by KPMG, how they mislead the investors, support your answer with auditing standards. [10] b. Discuss five auditing standards that were flouted and explain how they would have helped in this situation. [10] Question I CHOPPIES CASE Local retailer Choppies Limited continues to be under pressure following wecks of negative pablicity and subsequent failure to release financial results within the stipulated time. Since the beginning of the year, the share price of the retailer's stock at Botswana Stock. Exchange (BSE) has fallen by 30.2 percent. Available figures shows that the sharpest monthly decline in share price was register in August wben the price fell by 26.4 percent. On Thursday the Botswana Stock. Exchange Limited (BSEL) and Johannesburg Stock Exchange (JSE) halted the trading of Choppies Enterprises on the stock market, only for the two bourses to rescind within hours. Following the trading halt, Choppies quickly issued a trading statement and cautionary note, clarifying its Friday announcement. The Ramachandran Ontapathu led grocer said the delay in publication of results is dae to the current audit for the year ended June 2018. The grocer appointed a new auditor carlict this year after parting ways with K.MMG, its long time auditoc. The company says the board and auditors practices and policies. "The reassessments currently being undertaken relate to historical purchase price allocations on business acquisitions, depreciation and amostization accounting. valuation of inventory and impsiment assessments of property, plant and cquipment, intangible assets and deferred tax assets," the company said in the new statement. Choppies explained that the reassessments which are currently. ongoing are complex by nature, requiring careful analysis in order to determine the impact on prior and current periods. Furthermore, the retailer says its board of directors and its new auditors, PricewaterhouseCoopers (PWC), have uncovered number of matters relating to the current and earlict financial periods, which requife independent made. "Certain transactions and business relationships hitherto were not made fully apparent and were therefore not sufficiently considered in preparation of historical annual financial statements," read part of the statement. The transactions and relationships referred to include certain business acquisition transactions undertaken by South African subsidiary during the 2017 and 2018 financial years. Also part of the scrutiny is the ramifications of the "well published sharcholder dispute in Zimbabve." Choppies went on to say that while these independent verifications and expert legal analyses have been initiated, their completion date and outcomes cannot be determined with any reasonable certainty at this stagc, hence impacting the finalization or me couprany s suunour inancial results, their completion date and outcomes cannot be determined with any reasonable certainty at this stage, hence impacting the finalization of the company's audited financial results, which are a month behind schedule. On the issue of anticipated profit drop, the retailer says a combination of adverse trading conditions in South Africa, Mozambique and East Africa, as well as inventory losses will most likely affect the bottom line. "The final results for the current financial year may be further impacted by possible restatements on prior periods and accounting for transactions still being verified. As set above, the Group is not in a position to make any reasonable estimate of the impact of these matters (if any), until the necessary verifications, analyses and assessments are completed," the company said. The Friday announcement that alluded to the potential 20 percent drop in profits, together with dispute about its shareholding structure in Zimbabwe, has rubbed off shareholders, sending the company's stock on the JSE to drop by as much as 85 percent on Tuesday, while on the BSE the shares fell by 72 percent. Listed on the JSE in 2015 at R4.90, the shares were trading at o.42 cents by Thursday, a 91 percent drop. In Botswana, the company listed at P1.25, and is currently trading at P0.40. Question 1 (20 Marks) a. Discuss the unethical practices by KPMG, how they mislead the investors, support your answer with auditing standards. [10] b. Discuss five auditing standards that were flouted and explain how they would have helped in this situation. [10] Question I CHOPPIES CASE Local retailer Choppies Limited continues to be under pressure following wecks of negative pablicity and subsequent failure to release financial results within the stipulated time. Since the beginning of the year, the share price of the retailer's stock at Botswana Stock. Exchange (BSE) has fallen by 30.2 percent. Available figures shows that the sharpest monthly decline in share price was register in August wben the price fell by 26.4 percent. On Thursday the Botswana Stock. Exchange Limited (BSEL) and Johannesburg Stock Exchange (JSE) halted the trading of Choppies Enterprises on the stock market, only for the two bourses to rescind within hours. Following the trading halt, Choppies quickly issued a trading statement and cautionary note, clarifying its Friday announcement. The Ramachandran Ontapathu led grocer said the delay in publication of results is dae to the current audit for the year ended June 2018. The grocer appointed a new auditor carlict this year after parting ways with K.MMG, its long time auditoc. The company says the board and auditors practices and policies. "The reassessments currently being undertaken relate to historical purchase price allocations on business acquisitions, depreciation and amostization accounting. valuation of inventory and impsiment assessments of property, plant and cquipment, intangible assets and deferred tax assets," the company said in the new statement. Choppies explained that the reassessments which are currently. ongoing are complex by nature, requiring careful analysis in order to determine the impact on prior and current periods. Furthermore, the retailer says its board of directors and its new auditors, PricewaterhouseCoopers (PWC), have uncovered number of matters relating to the current and earlict financial periods, which requife independent made. "Certain transactions and business relationships hitherto were not made fully apparent and were therefore not sufficiently considered in preparation of historical annual financial statements," read part of the statement. The transactions and relationships referred to include certain business acquisition transactions undertaken by South African subsidiary during the 2017 and 2018 financial years. Also part of the scrutiny is the ramifications of the "well published sharcholder dispute in Zimbabve." Choppies went on to say that while these independent verifications and expert legal analyses have been initiated, their completion date and outcomes cannot be determined with any reasonable certainty at this stagc, hence impacting the finalization or me couprany s suunour inancial results, company said in the new statement. Choppies explained that the reassessments which are currently ongoing are complex by nature, requiring careful analysis in order to determine the impact on prior and current periods, Furthermore, the retailer says its boand of directors and its new auditors, PricewaterhouseCoopers (PWC). have uncovered number of matters relating to the current and earlier financial periods, which require independent verification and expert legal analysis before disclosures can be made. "Certain transactions and business relationships hitherto were not made fully apparent and were therefore not sufficiently considered in preparation of historical anmual fintancial statements," read part of the statement. The transactions and relationships referred to include certain business acquisition transactions undertaken by South African subsidiary during the 2017 and 2018 financial years. Also part of the serutiny is the ramifications of the "well published stareholder dispute in Zimbabwe." Choppies went on to say that while these independent verifications and expert legal analyses have been initiated, their completion date and outcomes cannot be determined with any reasonable certainty at this stage, hence impacting the finalization of the company's audited financial results, which are a month behind schedule. On the issue of anticipated profit drop, the retailer says a combination of adverse trading conditions in South Africa, Mozambique and East Afriea, as well as inventory losses will most likely affect the bottom line. "The final results for the current financial year may be further impacted by possible restatements on prior periods and accounting for transactions still being verified. As set above, the Group is not in a position to make any reasonable estimate of the impact of these matters (if any). until the necessary verifications. analyses and assessments are completed," the company said. The Friday announcement that alladed to the potential 20 percent drop in profits, together with dispute about its shareholding structure in Zimbabwe, has rubbed off shareholders, sending the company's stock on the JSE, to drop by as much as 85 percent on Tuestay, while on the BSE the shares fell by 72 percent. Listed on the JSE in 2015 at R4.90, the shares were trading at 0.42 cents by Tharday, a 91 percent drop. In Botswana, the company listed at Pl 25 , and is currently trading at P0.40. Question 1 (20 Marks) a. Discuss the unethical practices by KPMG, how they mislead the investors, support your answer with auditing standards. [10] b. Discuss five auditing standards that were flouted and explain how they would have helped in this situation. [10] Question I CHOPPIES CASE Local retailer Choppies Limited continues to be under pressure following wecks of negative pablicity and subsequent failure to release financial results within the stipulated time. Since the beginning of the year, the share price of the retailer's stock at Botswana Stock. Exchange (BSE) has fallen by 30.2 percent. Available figures shows that the sharpest monthly decline in share price was register in August wben the price fell by 26.4 percent. On Thursday the Botswana Stock. Exchange Limited (BSEL) and Johannesburg Stock Exchange (JSE) halted the trading of Choppies Enterprises on the stock market, only for the two bourses to rescind within hours. Following the trading halt, Choppies quickly issued a trading statement and cautionary note, clarifying its Friday announcement. The Ramachandran Ontapathu led grocer said the delay in publication of results is dae to the current audit for the year ended June 2018. The grocer appointed a new auditor carlict this year after parting ways with K.MMG, its long time auditoc. The company says the board and auditors practices and policies. "The reassessments currently being undertaken relate to historical purchase price allocations on business acquisitions, depreciation and amostization accounting. valuation of inventory and impsiment assessments of property, plant and cquipment, intangible assets and deferred tax assets," the company said in the new statement. Choppies explained that the reassessments which are currently. ongoing are complex by nature, requiring careful analysis in order to determine the impact on prior and current periods. Furthermore, the retailer says its board of directors and its new auditors, PricewaterhouseCoopers (PWC), have uncovered number of matters relating to the current and earlict financial periods, which requife independent made. "Certain transactions and business relationships hitherto were not made fully apparent and were therefore not sufficiently considered in preparation of historical annual financial statements," read part of the statement. The transactions and relationships referred to include certain business acquisition transactions undertaken by South African subsidiary during the 2017 and 2018 financial years. Also part of the scrutiny is the ramifications of the "well published sharcholder dispute in Zimbabve." Choppies went on to say that while these independent verifications and expert legal analyses have been initiated, their completion date and outcomes cannot be determined with any reasonable certainty at this stagc, hence impacting the finalization or me couprany s suunour inancial results, their completion date and outcomes cannot be determined with any reasonable certainty at this stage, hence impacting the finalization of the company's audited financial results, which are a month behind schedule. On the issue of anticipated profit drop, the retailer says a combination of adverse trading conditions in South Africa, Mozambique and East Africa, as well as inventory losses will most likely affect the bottom line. "The final results for the current financial year may be further impacted by possible restatements on prior periods and accounting for transactions still being verified. As set above, the Group is not in a position to make any reasonable estimate of the impact of these matters (if any), until the necessary verifications, analyses and assessments are completed," the company said. The Friday announcement that alluded to the potential 20 percent drop in profits, together with dispute about its shareholding structure in Zimbabwe, has rubbed off shareholders, sending the company's stock on the JSE to drop by as much as 85 percent on Tuesday, while on the BSE the shares fell by 72 percent. Listed on the JSE in 2015 at R4.90, the shares were trading at o.42 cents by Thursday, a 91 percent drop. In Botswana, the company listed at P1.25, and is currently trading at P0.40. Question 1 (20 Marks) a. Discuss the unethical practices by KPMG, how they mislead the investors, support your answer with auditing standards. [10] b. Discuss five auditing standards that were flouted and explain how they would have helped in this situation. [10]