Consider the following independent situations, all of which apply to audits of entities for the year ending 31 December 20X7: <\/p>
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(i) Slipway Limited, a listed company, has been experiencing declining sales over the last 2 years. Cost cutting has proved difficult due to the high level of imported machinery used in Slipway's operations and consequently margins have been falling. While the bankers are presently happy to continue providing Slipway with loan facilities, they do expect to see improved results in the next financial report. Articles about Slipway's expected financial results appearing in recent press reports all had quite a pessimistic tone. <\/p>
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(ii) Discount Foods Limited is a large supermarket chain with offices in all capital cities around Australia. Until 30 June 20X7 data processing relating to payroll transactions will be carried out in each capital city by an independent computer service bureau. <\/p>
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(iii) Getaway Pty. Limited is a long established firm which has been operating a boutique hotel in the Blue Mountains for over 20 years. During this time, it has adopted a conservative business strategy that has seen it produce adequate, though slightly unimpressive, results. A new CEO has been appointed to run the firm from 1 September 20X7. He has already released his plans for renovating the hotel, despite not officially serving as CEO yet. You have also heard him discuss the implementation of a new marketing strategy to boost occupancy rates. <\/p>
<\/p>
(iv) Angora Pty. Limited is a small primary producer specializing in the production of angora wool. Angora's recent display at a trade show has seen orders flood in from overseas buyers. The accountant, Michael, has done his best to satisfy the orders as quickly as possible while maintaining the appropriate (foreign currency) accounting records. However, from some of the questions he has been asking you, you suspect he is out of his depth. <\/p>
<\/p>
(v) Kings Pty. Limited has been manufacturing uniforms for the Australian market for the last 40 years. The government's recent tariff reduction policy has placed Kings in direct competition with cheaper uniforms manufactured overseas. In a bid to retain market share, Kings has been selling part of its school uniform range at less than cost. However, overall profit figures remain buoyant. <\/p>
<\/p>
Required: <\/p>
For each of the above independent situations describe the overall impact on audit risk and identify the specific component(s) of audit risk affected.<\/p>", "transcribed_text": "", "related_book": { "title": "Entrepreneurial Finance", "isbn": "1305968352, 978-1337635653, 978-1305968356", "edition": "6th edition", "authors": "J. Chris Leach, Ronald W. Melicher", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1482.jpg", "uri": "\/textbooks\/entrepreneurial-finance-6th-edition-1482", "see_more_uri": "" }, "free_related_book": { "isbn": "B09ZFLNVLP", "uri": "\/textbooks\/the-art-of-selecting-potency-and-doses-a-homoeopaths-guide-1st-edition-979-8885559317-269434", "name": "The Art Of Selecting Potency And Doses A Homoeopaths Guide", "edition": "1st Edition" }, "question_posted": "2024-06-28 05:34:34", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/how-does-ethics-differ-from-corporate-social-responsibility", "description": "How does ethics differ from corporate social responsibility?", "stars": 3 }, { "url": "\/study-help\/coaching-supervision-a-practical-guide-for-supervisees\/appreciate-how-classic-models-of-job-design-can-be-applied-1980364", "description": "appreciate how classic models of job design can be applied in practice;", "stars": 3 }, { "url": "\/on-december-31-2012-firth-company-borrowed-usd62092", "description": "On December 31, 2012, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-internet-bearing note. The note was issued to yield 10% interest. Unfortunately, during 2012,...", "stars": 3 }, { "url": "\/study-help\/questions\/i-need-the-answers-summary-account-9853246", "description": "i need the answers. Summary account)", "stars": 3 }, { "url": "\/study-help\/questions\/1-why-are-more-frauds-involving-revenue-than-other-types-304068", "description": "1. Why are more frauds involving revenue than other types of accounts? 2. What are management's assertions in the revenue business process? Which two are the most important in the revenue business...", "stars": 3 }, { "url": "\/study-help\/questions\/a-client-has-expressed-concern-about-schema-changes-occurring-without-792342", "description": "A client has expressed concern about schema changes occurring without their data platform team's knowledge. Which step in proactive data observability helps detect this issue?", "stars": 3 }, { "url": "\/study-help\/questions\/generate-a-publicprivate-key-pair-and-use-the-private-key-792348", "description": "Generate a public\/private key pair and use the private key to encrypt the message \"Hello Professor\". Use the tool and instruction at https:\/\/cryptotools.net\/rsagen or any other key generator.", "stars": 3 }, { "url": "\/study-help\/questions\/a-wellinsulated-2m-3-rigid-tank-contains-saturated-ammonia-at-792674", "description": "A well-insulated 2-m 3 rigid tank contains saturated ammonia at 40 C. Initially, the tank contains 50% (volume based) of this ammonia in liquid form and the rest (50%) in vapor form. The valve (on...", "stars": 3 }, { "url": "\/study-help\/questions\/a-combustion-unit-is-burning-refused-derived-fuel-rdf-consisting-792710", "description": "A combustion unit is burning refused derived fuel (RDF) consisting of 88% organics, 7% water, and 5% inorganics (inerts) at a rate of 1000 kg h. Assume the heat value of the fuel to be 17,000 kJ\/kg...", "stars": 3 }, { "url": "\/study-help\/questions\/a-4m-long-150kg-steel-beam-is-attached-to-a-793235", "description": "A 4-m long, 150-kg steel beam is attached to a wall with one end connected to a hinge that allows the beam to rotate up and down. The other end of the beam is held in a horizontal position with a...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/in-what-section-of-the-financial-plan-are-compliance-obligations-4245820", "next": "\/study-help\/questions\/the-town-of-newport-issued-1500000-of-general-obligation-refunding-4245822" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Consider the following independent situations, all of which apply to audits of", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/consider-the-following-independent-situations-all-of-which-apply-to-4245821" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }" } }