Question
Your audit client, Didi Restaurant Ltd., operates a chain of restaurants in the Accra-Tema metropolis specializing in Ghanaian dishes. You are the audit manager in
Your audit client, Didi Restaurant Ltd., operates a chain of restaurants in the Accra-Tema metropolis specializing in Ghanaian dishes. You are the audit manager in charge of the 2020 audit. You are informed by Mr. Kofi Kojo, the accounts manager of the client, that the Managing Director made payments of various sums GHS 2.5 million, GHS 3.5 million, and GHS 4.5 million on three-monthly occasions respectively into the bank account of the company. These amounts were later transferred to various foreign bank accounts in Nigeria, Columbia and Switzerland respectively, also on three-monthly occasions in different company names. Mr. Kofi Kojo also informed you that the Managing Director has instructed him not to record the transactions in the accounting records as they had nothing to do with Didi business. The annual turnover of the company had not exceeded GHS 1 million in the past three years.
Required:
1. Comment on the situation outlined in the case.
2. Explain the reasons why would be difficult for an auditor to detect money laundering activity
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started