Section A Short Answer Questions: 35 Marks (7 x 5 Marks) Question 1 (20 Marka) uo ended 31 December 20X8. During your initial plarently manstrng hild with the CFO and his finance team, he told you about thlanning products is called Fast-Toast", an a very low cost heating element. Over the Audit Manager responsible for the audit of Beta Limited. You are cu mpany's operations, as per below: You are the planning the audit for the meeting held with the CF matters O and his finance team, he told you about the followi which have arisen in relation to the co 1. One of Beta Lid's major fully imported last three months, Beta Ltd has had numerous complaints and negative feedback about -Fast-Toast. Warranty claims have quadrupled from 396 of sales to 12% of sales. The root cause of the problem appears to be the heating inexpensive sandwich maker with element which creates excessive heat if left on for too long. 2. Beta Ltd has recently employed a new assistant accountant, Roberta, who graduated in 2017. She has also been given additional responsibilities, ding: handling overseas customers' queries, creating sales invoices in sales in the dilferent currencies, adjusting stock levels and r short "spot-check or random review of her work, she often appears stresse translation. ecordin accounting records. Whilst the CFO says she is very obliging and requires only and unable to answer straightforward questions about foreign exchange 3. During the year, three employees were terminated for theft. Stock was stolen from the warehouse and then sold online at significantly reduced p employees worked in difterent department employees were involved and they have already been charged by the police CFO believes this had been going on for more than 12 months. The thre rices. and used falsely created journal entries to cover up their illicit activities. The CFO is confident that only the three Required () For each of the matters above (1,2,3), explain how the components of audit risk (i.e. inherent, control or detection risk) are affected and nominate the accounts which are likely to be materially affected. (3 x 5 marks) Use the following table to structure your response for each matter Matter # Audit Risk Component(s) Accounts) (on) What is detection risk? Given the issues raised in the matters above (1, 2 & 3) how should the Auditor set detection risk when planning for the audit cf Beta Ltd? (5 marks) Section A Short Answer Questions: 35 Marks (7 x 5 Marks) Question 1 (20 Marka) uo ended 31 December 20X8. During your initial plarently manstrng hild with the CFO and his finance team, he told you about thlanning products is called Fast-Toast", an a very low cost heating element. Over the Audit Manager responsible for the audit of Beta Limited. You are cu mpany's operations, as per below: You are the planning the audit for the meeting held with the CF matters O and his finance team, he told you about the followi which have arisen in relation to the co 1. One of Beta Lid's major fully imported last three months, Beta Ltd has had numerous complaints and negative feedback about -Fast-Toast. Warranty claims have quadrupled from 396 of sales to 12% of sales. The root cause of the problem appears to be the heating inexpensive sandwich maker with element which creates excessive heat if left on for too long. 2. Beta Ltd has recently employed a new assistant accountant, Roberta, who graduated in 2017. She has also been given additional responsibilities, ding: handling overseas customers' queries, creating sales invoices in sales in the dilferent currencies, adjusting stock levels and r short "spot-check or random review of her work, she often appears stresse translation. ecordin accounting records. Whilst the CFO says she is very obliging and requires only and unable to answer straightforward questions about foreign exchange 3. During the year, three employees were terminated for theft. Stock was stolen from the warehouse and then sold online at significantly reduced p employees worked in difterent department employees were involved and they have already been charged by the police CFO believes this had been going on for more than 12 months. The thre rices. and used falsely created journal entries to cover up their illicit activities. The CFO is confident that only the three Required () For each of the matters above (1,2,3), explain how the components of audit risk (i.e. inherent, control or detection risk) are affected and nominate the accounts which are likely to be materially affected. (3 x 5 marks) Use the following table to structure your response for each matter Matter # Audit Risk Component(s) Accounts) (on) What is detection risk? Given the issues raised in the matters above (1, 2 & 3) how should the Auditor set detection risk when planning for the audit cf Beta Ltd