Jean Wang is a junior external auditor of China Chance Limited this year. She asked China Chance for their cash and cash equivalents information in DD Bank. The list of the information includes bank balances, loans, guarantees, acceptance bills, and letters of credit, etc. Several days later, Jean received the list of the information made by the staff at China Chance, which was without any chops or managements signature.

Requirement:

a) Suggest at least two audit tests/procedures to help Jean to get reliable evidence of the list of information. (6 marks)

Question

Except for cash and cash equivalents, Jean also was assigned to identify substantive audit procedures for theRevenue and Electricity account balances that will provide sufficient appropriate audit evidence regarding the accuracy of these account balances.

Requirement:

b) Design at least one (1) substantive audit procedure for each account (i.e., Revenue and Electricity). (You may need to consider the characteristics of accounts in your answers.) (8 marks)