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Just provide me answers for only Q(e) for both (a) & (b). From Q(a) to Q(d) I don't need the answers. Thank you!!!!!! ACW352 Advanced

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Just provide me answers for only Q(e) for both (a) & (b).

From Q(a) to Q(d) I don't need the answers.

Thank you!!!!!!

ACW352 Advanced Auditing Semester 1, Academic Session 2021/2022 Group Assignment Hijau Sdn Bhd (60 marks) Your firm has been appointed as the extemal auditor of Hijau Sdn Bhd (Hijau) for the year ending 31 March 2021. Hijau operates a retail chain of 30 garden centres across Malaysia, supplying customers with trees and plants at various development stages as well as gardening products such as lawn mowers, planting tools and other gardening essentials. Customers pay for their respective purchases by using cash or debit/credit cards. The business has been successful due to the increased popularity of gardening content over social media. In August 2020, the board announced the commencement of a programme of building works to increase the size of its garden centres. As a result, the directors obtained a bank loan on 31 October 2020 to ensure sufficient cash was available for the building works, to be carried out from November 2020 to March 2021. The bank loan is repayable over three years with interest payable quarterly in arrears. Part of the loan was also used to make a lump-sum payment of RM1.5 million to Serenity Sdn Bhd (Serenity) for a two-year sponsorship deal. Serenity organises gardening shows in Malaysia on their social media page and appointed Hijau as its lead sponsor for all their programmes for the two years ending 31 December 2022. Serenity will use Hijau's brand when promoting its gardening shows throughout the sponsorship period. Employees at each garden centre include permanent gardening staff, who maintain the trees and plants available for sale, and permanent retail and customer services staff. In addition, a large number of temporary staff are employed between April and September due to the increased volume of sales in this period Plants and trees are purchased, ready for sale, from various specialist suppliers in Malaysia and overseas. Overseas suppliers' invoice Hijau in their local currencies. Hijau requires a licence to import plants and trees into Malaysia and is regularly inspected by the licensing authority to ensure that it is complying with the terms of the licence. Hijau plans to undertake a full inventory count at each garden centre on 31 March 2021. The engagement partner has provided you with the following extracts from the financial statements for the full year to 31 March: 2021 (estimated) RM1000 2020 (audited) RM"000 Statement of profit or loss Revenue Cost of sales Gross profit 125,568 (79,635) 45,933 93,510 (65,458) 28,053 Finance cost (82) (80) Statement of financial position Current assets Inventories 7,636 4,483 Current liabilities Trade payables 6,747 6,513 The directors are planning to diversify the business by introducing, in September 2021, a gourmet food hall and gift shop into each garden centre to take advantage of the increasing gardening craze on social media. In order to fund the proposed diversification, a new loan application has been submitted to the company's bank. The bank wishes to examine the audited financial statements for the year ended 31 March 2021 together with the profit and cash flow forecasts in respect of the proposed diversification for the three years ending 31 March 2024. The bank requires an independent examination of, and a report on the profit and cash flow forecasts and Hijau's directors have requested that your firm perform this engagement. Hijau's finance director, Izaty Rahim, has proposed, in respect of this engagement, that: (1) The responsibilities of your firm include making recommendations to the directors as to how best to prepare and present the profit and cash flow forecasts to increase the likelihood of the bank agreeing to Hijau's application; and (2) Your firm's fee for the examination of and report on the profit and cash flow forecasts will only be paid once the bank agrees to provide the finance to Hijau with no fee payable should Hijau's bank decline the new loan application If the loan is approved by the bank, Hijau plans to use the funds to add more refrigeration units and shelving racks in each garden centre and also make an initial purchase of inventories of gourmet foods and gifts. In addition, an upgrade to the computerised tills (cash register) system at each garden centre will be performed by Pandai Sdn Bhd, Hijau's technology provider. As the upgrade represents an enhancement to the current tills system, the directors propose 2 to include the cost of the upgrade as an addition to computer equipment within non- current assets. Requirements a) From the information provided, identify the areas of audit risk in respect of the financial statements of Hijau for the year ending 31 March 2021. For each audit risk explain the factors which have led you to identify that risk. (20 marks) b) From the information provided, identify the key receipts and payments that you would expect to be included in the cash flow forecast prepared by the directors of Hijau in respect of the diversification plans for the three years ending 31 March 2024. For each key receipt and payment, identify the specific matters you would consider when reviewing the reasonableness of the assumptions in forecasting that receipt or payment. (10 marks) c) State the key difference you would expect to see between the items included in the profit forecasts and the receipts and payments included in the cash flow forecasts prepared by the directors of Hijau. (4 marks) d) Explain the professional issues for your firm raised by Izaty Rahim's proposal in (1) and (2) (6 marks) e) In respect to Hijau prepared financial statements under audit, discuss the implications for your firm's auditor's report in each of the following two potential circumstances: (a) Hijau is not a going concem. (6) There is a significant uncertainty about the going concern status of Hijau. (20 marks)

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