QUESTION 1 (30 Marks {a) List down and explain the 5 Fundamental Principles of the APES110 Code of Ethics for Professional Accountants. (5 marks) {b} List down the 5 threats to Auditor's Independence and explain each threat. (5 marks) {c) List down the Financial Statement Assertions relating to Account Balances and explain each assertion. {6 marks) {d} List down the Financial Statement Assertions relating to Classes of Transactions and explain each assertion. (6 marks) {e] What are the four {4) main Types of Substantive Procedures? Explain each type. (4 marks) {fl Why does the auditor assess control risk? (4 marks) QUESTION 2 (9 Marks) Brenda Jones is a newly qualified accountant who is carrying out her first audit as the in-charge auditor for a construction company client that is engaged in a range of long-term contracts. Brenda has little experience of these types of clients and the accounting reguirements in relation to long-term contracts. John Bull is the CFO of the client, he is a busy man and has a notorious reputation for being unfriendly to auditors. You are Brenda's supervisor and it has become apparent that she has not got to grips with the accounting issues involved and has avoided asking the necessary questions of John Bull to gain an understanding of the company's transactions and the necessary audit work required to obtain evidence on the long-term confract transactions. REQUIRED: Explain to Brenda the importance of professionalism, using the Code of Ethics for Professional Accountants and particularly referring to its guidance on competence and give advice as to how she should proceed. (9 marks) QUESTION 3 (6 Marks) You are an audit manager of David and Goliath Accounting Firm (DG) and listed some of substantive procedures you want to perform during the year end audit: 1. Perform a debtors' confimnation (a.k.a. accounts receivable circularization). 2. Calculate the accounts receivable tumowver and compare with previous year's turnover. 3. Select a sample of invoices and ensure that they have been properly recorded in the sales ledger. REQUIRED: HName the type of substantive audit procedure in EACH of the above and provide ONE key financial statement assertion to which it significantly relates. (& marks) QUESTION 4 (15 Marks) The financial year of XZ Pty Lid ("XZ") ended on 30 June 2023. Your auditor's report was signed on 25 August and the financial statements were issued on 10 September. Listed below are events that occurred or were discovered after the end of the financial year. Assume that each has a \"material\" effect on the financial statements. 1. 25 August you discovered that a new legal action commenced against XYZ in relation to a faulty product sold in May 2023, 2. In June, one of XZ's largest debiors informed XY'Z that it was experiencing serious financial difficulties. On 25 August, XYZ was informed that the debter had gone into receivership. Preliminary reports suggest XYZ will recover only 10 cents in the dollar of the outstanding debt. 3. 1 September a fire bumnt down one of XYZ's warehouses, resulting in a loss of 20% of the inventory that was on hand at that date. REQUIRED: {a) Indicate your responsibilities and specific audit procedures for EACH of the above events. (3 marks) {b) Indicate the correct accounting treatment in the financial statements (if any) you would recommend in relation to EACH of the event. (6 marks) {c) What if the management did not agree with your recommendation in (b} and takes no action, what would be your Audit Opinion in EACH event and why? (6 marks) You can present your answer using the table format below: and specific audit in the financial statements. management takes no action procedures. 1. P .. ete