Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are a trainee auditor and work for an audit firm in Hong Kong called Admiralty Partners. It is the middle of January and you

You are a trainee auditor and work for an audit firm in Hong Kong called Admiralty Partners. It is the middle of January and you are auditing at your client, Angel Ltd. a company which sells products to customers on credit. Your manager has asked you to perform the substantive audit testing of trade receivables at Angel Ltd.

While you are at Angel Ltd. the managing director asks to see you. She would like to know some detail of what your auditing colleagues were doing when they visited Angel Ltd. during the previous October. Her understanding is that this was a planning visit by the auditors but would like to have more detail of what activities were carried out in particular in relation to the work performed on controls testing. She does not understand why you are at the business in January doing even more testing and asks why this could not have been performed in the previous October visit. She also would like to understand the role of analytical review in the auditors work.

REQUIRED:

  1. Write a schedule of the testing activities you will perform for the substantive testing of trade receivables.(for correctly and clearly stated substantive tests relevant to trade receivables (per valid and fully detailed test to a maximum 12).

  1. Write a memo to the Managing Director of Angel Ltd. discussing the purpose of each of walk through testing; controls testing and substantive testing.(for valid and clear discussion of each testing category required.)

  1. Explain briefly to the Managing Director the role of analytical review in the audit at the stages of planning, substantive testing and final audit review. (for valid and clear statement of the role of AR in each of the three main stages of the audit. Two marks for each stage to maximum of six.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Decision Makers

Authors: Peter Atrill, Eddie McLaney

9th Edition

1292251255, 9781292251257

More Books

Students also viewed these Accounting questions

Question

Why does a bond price change when interest rates change?

Answered: 1 week ago

Question

What does this look like?

Answered: 1 week ago