QUESTION Belso Comanufactures women's clothing and its your end was 31 July 2019. You are an audit supervise of Serlam & Co and the year-end audit for Belo Co is due to commence sheetly The draft financial statements recognire profit before tax of GHS 2.600,000.00 and alsof GHS18,000.000.00. You have been given responsibility for muditing receivables, which is a material balanes, and as part of the nadit approach, a positive receivables circularization is to be undertako At the planning meeting the Finance Director of Belo Co informed the audit engagement partner that the company was closing one of its smaller production sites and as a result, a number of employees would be made redundant. A redundancy peovision of GHS110,000.00 is included in the distancial statements Required: Describe the steps the audite should perform in undertaking a positive receivables circularization for Bele Company IM (1 mark) b) Describe substantive procedures, other than a receivables circularization, the audio should perfect to verify receivables in the financial statement 15 mars Describe substantive procedures the auditor should perform to confirm the redundancy provisie the year end (10 marks A few months have now passed and the audit team is performing the audit fieldwork including the wait procedures which you recommended over the redundancy provision. The team has calculated that the necessary provision should amount to GHS 305.000.00. The Finance Director is not willing to adjust the draft financial statements Required: Discuss the issue and describe the impact on the auditor's report, if any, dould this is (Total mark QUESTION 2 ISA 300 Planning an audit of financial statements requires the editor to plan his andito that the audit will be performed in an effective manner Required: a) Explain why the need for planning exists and what benefits are to be derived from adapting cha appeach mark b) Set out the steps you would take prior to the commencement of audit of a limited company which has been a client for a number of years Planning is equally relevant to the work of the internal auditor. Explain how the intemaldita's planning differs to that of the external de (Total 15 mark QUESTION 3 BilDave Supplies Lid employs 100 salesmen, cach of whom covers a different area and is applied with a car. At the end of each weck.cach salesman submits m expense claim on a pre-printed for supporting vouchers attached. Expenditure is on fuel together with invoices for hotel accommodation meals and entertainment are not attached Claims are scrutinized by the Assistant Accountant. She raises any queries with the salesmen concerned and makes out chiques for signature by the two Directors The amount of salesmen's expenses paid out annually is material to the financial statement Required a) Discuss the shortcomings of this system. 15 marks b) Suggest ways in which it could be improved. mark c) List the test of control that the auditor might perform on this system. mark QUESTION Belso Comanufactures women's clothing and its your end was 31 July 2019. You are an audit supervise of Serlam & Co and the year-end audit for Belo Co is due to commence sheetly The draft financial statements recognire profit before tax of GHS 2.600,000.00 and alsof GHS18,000.000.00. You have been given responsibility for muditing receivables, which is a material balanes, and as part of the nadit approach, a positive receivables circularization is to be undertako At the planning meeting the Finance Director of Belo Co informed the audit engagement partner that the company was closing one of its smaller production sites and as a result, a number of employees would be made redundant. A redundancy peovision of GHS110,000.00 is included in the distancial statements Required: Describe the steps the audite should perform in undertaking a positive receivables circularization for Bele Company IM (1 mark) b) Describe substantive procedures, other than a receivables circularization, the audio should perfect to verify receivables in the financial statement 15 mars Describe substantive procedures the auditor should perform to confirm the redundancy provisie the year end (10 marks A few months have now passed and the audit team is performing the audit fieldwork including the wait procedures which you recommended over the redundancy provision. The team has calculated that the necessary provision should amount to GHS 305.000.00. The Finance Director is not willing to adjust the draft financial statements Required: Discuss the issue and describe the impact on the auditor's report, if any, dould this is (Total mark QUESTION 2 ISA 300 Planning an audit of financial statements requires the editor to plan his andito that the audit will be performed in an effective manner Required: a) Explain why the need for planning exists and what benefits are to be derived from adapting cha appeach mark b) Set out the steps you would take prior to the commencement of audit of a limited company which has been a client for a number of years Planning is equally relevant to the work of the internal auditor. Explain how the intemaldita's planning differs to that of the external de (Total 15 mark QUESTION 3 BilDave Supplies Lid employs 100 salesmen, cach of whom covers a different area and is applied with a car. At the end of each weck.cach salesman submits m expense claim on a pre-printed for supporting vouchers attached. Expenditure is on fuel together with invoices for hotel accommodation meals and entertainment are not attached Claims are scrutinized by the Assistant Accountant. She raises any queries with the salesmen concerned and makes out chiques for signature by the two Directors The amount of salesmen's expenses paid out annually is material to the financial statement Required a) Discuss the shortcomings of this system. 15 marks b) Suggest ways in which it could be improved. mark c) List the test of control that the auditor might perform on this system. mark