are 10 accounts out of this sample which he wants the audit senior, you, to analyze in greater detail. The details of those accounts are presented below in the table immediately below. Jeffery has decided that monetary unit sampling is appropriate. Required: (a) What effects will the deteriorating controls have on detection risk? (2 marks) (4 marks) (b) State four internal control procedures for the audit of accounts payables. (c) What decision should Jeffery make about the level of subsequent testing based on the assessment of Jamaican Limited internal controls? (4 marks) (d) You are requested to complete the table below in your answer booklet with respect to the columns entitled Misstatement and Misstatement per Dollar Unit. Each correct entry is worth 1/4 mark. (5 marks) Recorded Value $10,200 $22,222 $35,459 $23,876 $6,000 $25,000 $2,789 $8,000 $12,900 $3,500 Audited Value Misstatement $5,350 $19,888 $45,000 $42,566 $5,500 $15,000 $2,000 $12,896 $12,000 $1,500 Misstatement per Dollar Unit

Question 2 (15 marks) Jeffery Brown is the audit manager responsible for the audit of the Jamaican Limited. He is currently in a discussion with the audit senior, Alexander Grant, who will be in charge of the audit of accounts payables which the client has reported in their accounts for the current period as being $21 million. Based on Jeffery's extensive knowledge of the client, he believes that the internal control systems established by management has been deteriorating as there has been several changes to key management personnel during the period under review. Based on the new information, the auditor has made a new assessment to accept a lower level of risk associated with incorrectly validating a balance when in fact the balance ought to have been rejected as invalid. The level of this risk used previously was 10% and this will be decreased for the current year based on the internal control findings outlined above. Jeffery has decided, to select a sample of 125 accounts payables for confirmation. There are 10 accounts out of this sample which he wants the audit senior, you, to analyze in greater detail. The details of those accounts are presented below in the table immediately below. Jeffery has decided that monetary unit sampling is appropriate. Required: (a) What effects will the deteriorating controls have on detection risk? (2 marks) (4 marks) (b) State four internal control procedures for the audit of accounts payables. (c) What decision should Jeffery make about the level of subsequent testing based on the assessment of Jamaican Limited internal controls? (4 marks) (d) You are requested to complete the table below in your answer booklet with respect to the columns entitled Misstatement and Misstatement per Dollar Unit. Each correct entry is worth 1/4 mark. (5 marks) Recorded Value Audited Value Misstatement Misstatement per Dollar Unit $10,200 $5,350 $22,222 $19,888 $35,459 $45,000 $23,876 $42,566 $6,000 $5,500 $25,000 $15,000 $2,789 $2,000 $8,000 $12,896 $12,900 $12,000 $3,500 $1,500