Question 1

Mr Sam is an audit manager in an audit firm with 10 officers and 300 staffs. His firm is the auditor of Jumbo Sdn Bhd, a chain of supermarkets since many years ago. The overall planning work and tests of control have been completed for Jumbo Sdn Bhd for the year ended 31 December 2020. The staffs are still working on the substantive procedures. The inventory checking system which is continuously adopted by the company is good and it is found that the year-end records are reliable.

Jumbo Sdn Bhd is planning to open a new store in the year 2021. It is then relied on the records and intending to invest a substantial amount to open the store. It also has been discussing and negotiating the matter with both banks and property companies.

Required:

a)Critically assess the purposes of reviewing the following documents while auditing Jumbo Sdn Bhd:

i)Overall financial statements. [10 marks]

ii)Working papers.[10 marks]

b) Describe any TWO (2) responsibilities of auditors with regard to subsequent events as stated in International Standards on Auditing (ISA) 560. [5 marks]