Background: You are part of the audit team assigned to the audit of Maidenhair Enterprises for the year ended 30 June 2020. This is the third year that your firm has been engaged for the audit of Maidenhair. Notes from last years audit file indicated that internal controls around revenue and current assets are strong, while controls around other accounts are generally weak. Tests of controls confirmed this is also the case for the current year. The preliminary assessment of materiality has been set at $5,000. The unaudited trial balance for the client is shown below. The senior auditor in your team has asked each team member to substantively test a different account. Refer to the following tables to identify the account that has been allocated to you. Student ID: Allocated account: 1100796 Sales 1101998 Cost of sales 1108389 Consulting revenue 1110201 Interest income 1114296 Other income 1118364 Bank charges 1120113 Interest expense 1120135 Printing 1120281 Sales 1120794 Cost of sales 1121233 Consulting revenue 1121263 Interest income 1121416 Other income 1121807 Bank charges Student ID: Allocated account: 1123464 Interest expense 1124581 Printing 1124812 Sales 1126119 Cost of sales 1126329 Consulting revenue 1127599 Interest income 1127624 Other income 1127661 Bank charges 1127677 Interest expense 1127852 Printing 1128020 Sales 1128324 Cost of sales 1121296 Consulting revenue Maidenhair Enterprises Trial Balance June 30, 2020 Current year Prior year June 30, 2020 June 30, 2019 Dr Cr Dr Cr Cash at bank 37,525 36,271 Accounts receivable 36,365 34,642 Inventory 175,295 173,034 Machinery 141,000 140,900 Accumulated depreciation 30,750 23,250 Furniture 11,000 11,000 Accumulated depreciation 2,623 2,050 Accounts payable 12,450 13,450 Bank Loan 240,000 240,000 Sales 241,470 230,520 Cost of sales 130,250 135,501 Consulting revenue 53,645 37,890 Interest income 56 32 Other income 1,434 5,075 Bank charges 515 350 Depreciation 8,073 7,944 Interest expense 12,343 10,092 Printing 501 896 Wages 55,260 54,005 Superannuation 5,349 5,095 Equity (net) 31,048 57,463 613,476 613,476 609,730 609,730 Your task: Your task is to prepare a working paper/s to be included in the audit file, for your allocated account. The working paper/s must address the six points below. 1. Consider which assertions are likely to be most at risk for this account. Identify 3 relevant assertions. 2. Explain why these assertions are likely to be at-risk. In doing so, you should consider fluctuations in the account balance (e.g. compared with the prior year) and consider the key risks generally applicable to this type of account. 3. Identify and describe an audit procedure/s which would provide sufficient appropriate evidence for the identified assertions. Ensure that your working paper clearly identifies the account being tested, a relevant audit objective, relevant assertions, and the procedure/s to be used. It is recommended that you prepare your audit working paper using either Microsoft Excel or Microsoft Word and use the feature to add additional notes/justification for your choices. The comments feature should also be used to record your references to information sources. 4. The senior auditor has asked you to select a sample of 5 transactions from your general ledger account for vouching. Access the general ledger detail for your account and identify 5 specific entries to make up your sample. Describe/illustrate your sample selection process. 5. Provide a brief statement justifying your sample selection approach with reference to the Australian auditing standards and the international auditing standards. Identify the benefits of your chosen approach compared to alternative approaches. 6. Comment on whether vouching these 5 transactions is likely to provide sufficient appropriate evidence for this account. In doing so, consider how material the account is and the level of detection risk that would be appropriate for this account. Also, consider the direction of testing, and whether it is appropriate for your assertions. You may like to address points 4 to 6 on a separate working paper, or include this on your existing working paper. You do not have the documents required to complete the audit testing for this account. As such, your working paper/s will be incomplete. There should be a section at the bottom which says Conclusion: but this will remain blank. It would likely be completed during a site visit to the client. Please do consulting reveune