Hi, may i please obtain the answers to the attached questions? Thanks

REMEMBER THAT THE QUIZ for Module 1 IS HERE Module 2 Part A Question 1 You have been assigned to the audit of inventory at ABC Ltd (ABC), a distributor of hardware to retailers throughout Australia. While planning for the audit, you have obtained the following information: ABC has 100 warehouses located throughout Australia. Warehouses are used on a short-term basis depending on regional demand. The marketing manager has indicated that the hardware market is highly competitive and the ability to deliver product quickly is essential. The financial controller was not made aware of six warehouses when conducting inventory counts and only found after the balance date. This resulted in the inventory at these warehouses not being counted. The inventory omitted comprised approximately 4 per cent of total inventory. ABC lacks a timely system for recording the receipt of inventory from suppliers. This has led to significant discrepancies between the warehouse department (housing the inventory) and the purchases department. Inventory is often moved between warehouses in order to cater for stronger demand in particular areas owing to seasonal fluctuations. Required: (a) Describe four problems that may occur in accounting for inventory. (b) Identify the financial report assertions for the audit of inventory at ABC that you believe would be assessed as high risk. Provide reasons for your choice. (c) Identify whether any accounts other than inventory (asset) are impacted by the information provided in the situations. Question 2 You have been assigned to the audit of property, plant and equipment at Brett's IT Ltd (BIT). The majority of BIT's property, plant and equipment (PPE) are personal computers (PCs) and associated network hardware. As the value components associated with the network are material, you have some concerns regarding the best way to proceed with the audit of the PCs. You have discussed the nature and extent of equipment held with Todd, the IT manager at BIT, who told you the following: Each PC is barcoded on installation and the detail is given to the accounting area. Todd indicated that each section manager is responsible for ensuring all barcodes are accounted for annually. All PCs arc compulsorily retired either in three or four years depending on their condition toward the end of the second year. At this point they are scrapped; however, the IT department keeps a small number for spare parts (monitors, keyboards and so on). Equipment and network installation is repaired, retired or added to as required. Whenever a new piece of equipment is purchased, the purchase is arranged by the accounting section and the record of purchase held in that area. Todd periodically notifies the fixed assets clerk of any equipment that has been scrapped. Given the last comment, you are now concerned about the validity of the balances recorded for network equipment and ask the fixed assets clerk to explain how he know everything is accounted for. He replies 'Frankly, I have no real idea what is physically still in that area; I just know what we purchased and I rely on Todd to tell me what to write off'. Required: a) Select three procedures that you could use to audit the computer equipment held by BIT, identifying the assertion(s) tested for each procedure. b) Discuss the merits of each procedure in relation to their reliability and their cost. c) Apart from PPE (asset), Identify other accounts that may be impacted based on the information you are given in the case. Question 3 4.27 Materiality MEDIUM Lyon & Associates (Lyon) are the auditors for the year ending 30 June 2015 for Leather Goods Ltd (LGL), a manufacturer of leather accessories. The following financial information was extracted from LGL's 30 June 2015 forecast, updated in the previous month for 'actual year-to-date' results: Revenue Total assets Net assets Profit before income tax expense FORECAST 30 JUNE 2015 $M 300 325 160 23 ACTUAL 31 MAY 2015 $M 260 280 145 19 LGL manufactures and sells leather handbags and accessories to retail outlets. Custom-made handbags are also sold via the internet and directly from the retail shop, which is onsite at its warehouse location. During the economic downturn, the leather accessory industry has been very competitive, and consumer confidence has fallen during the past six months. The company has recently restructured its operations to outsource its Australian manufacturing to a new factory in China from May 2015. As auditors of LGL for the past five years, Lyon's experience with the company indicates that their forecasts are generally reliable. REQUIRED: (a) Select an appropriate benchmark for determining the preliminary figure for materiality for LGL. Explain your selection. (b) Identify three factors from the information that will lead to a decrease in preliminary overall materiality. For each factor identified, explain why it will lead to a decrease in preliminary overall materiality. Question 4 4.25 Audit risk model MEDIUM Consider the following independent situations, all of which apply to audits of entities for the year ending 30 June 2015: (a) One of Kitchen Ltd's major product lines is the Quick Serve, a 'no frills' microwave oven. Over the last three months, warranty claims on the Quick Serve have tripled from 3 per cent of sales to 9 per cent of sales. The problem appears to relate to the glass turntable, which may shatter if the oven is used constantly at full power. (b) Wings Pty Ltd (Wings) is a small primary producer specialising in the production of vacuum-packed emu meat. Wings' recent display at a trade show has seen orders flood in from overseas buyers. The accountant, Louise, has done her best to satisfy the orders as quickly as possible while maintaining the appropriate (foreign currency) accounting records. However, based on some of the questions she has been asking you, it appears that she is out of her depth. (c) Alpha Ltd (Alpha) distributes and markets snack foods to major supermarket chains around Australia. During the year, four members of staff were dismissed for stealing inventory and selling it to a small convenience store at discount prices. It is believed that the practice had been carried out for at least 18 months. The four staff members were working in different departments and had been able to cover their activities through fraudulent journal entries. The CEO of Alpha, Graham Handley, is confident that all parties involved have been identified and legal action has been taken. REQUIRED: For each of the independent situations above, identify the specific component(s) of audit risk that would be affected and explain how they would be affected. Question 5 4.30 Audit Tests MEDIUM You are working on the audit of Sunshine Foods Ltd (Sunshine), a wholesale distributor, for the year ending 30 June 2015. You have reviewed the audit plan for the revenue account. The audit plan documents the relevant assertions and the detailed procedure you are to perform in relation to each of these assertions. An extract from the audit plan is reproduced below: ITEMASSERTION DETAILED AUDIT PROCEDURE 1 Completeness Select a sample of sales from the sales journal and ensure each sales invoice has been matched by the sales staff to an authorised delivery docket and approved customer order. 2 Accuracy Select a sample of sales from the sales journal and agree the sale price to the authorised price list. 3 Cut-off Select a sample of sales invoices recorded a few days prior to the year end and then agree dates on the invoices to the dates on the delivery documents signed by the customer. REQUIRED For each of the items 1 to 3 above: (a) Indicate whether the audit procedure is a substantive test of details or a test of controls. (b) Indicate whether the audit procedure addresses the given assertion and if the audit procedure does not address the given assertion, state the assertion that is addressed. Provide an explanation for your