Scenario 9 Ms. Yasmin Khan Mohammed is the chief auditor of Yasmin Audit Team. Recently the...

Scenario 9

Ms. Yasmin Khan Mohammed is the chief auditor of Yasmin Audit Team. Recently the team is invited to conduct the external audit of Omantel. A true and fair report has to be prepared on the client company. Omantel has effectively employed the internal control components to various departments and activities.

Question 9:

List and explain any 5 elements included in an unmodified audit report with reference to Omantel. (5 X 1= 5Marks)

Question 10:

Discuss any five inherent limitations of the internal control system of the client business. (5 X 1= 5Marks)

Solutions

Expert Solution

There are various Inherent Limitation of the Internal control system which as:

-Internal control system is although applied but not give assurance to the management that objective of the organisations are met as per the norms.

-Chance of human error is also observed as mistake is taken from the person involved, by forgetting to use control steps, or may be person not able to understand how control system can be used.

-There is also serious drawback of the system is not segregation of the duties due to not properly designed.

-In order to get personnel advantage some of the member of the management team is override any of the aspect of the control system.

-When two or more person which are engaged on the same task may be chance of collusion to each other on some matters which result to effects the internal control report.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The audit committee reports directly to the external auditor. board of directors. internal auditor. chief executive...

The audit committee reports directly to the external auditor. board of directors. internal auditor. chief executive officer. The treasurer of a company is responsible for identifying areas where a firm might incur substantial losses. preparing financial statements for the annual report. making sure a firm has adequate cash available. managing a firm’s risk exposure in financial and commodity markets. Which of the following is an example of frivolous agency costs? Providing lunch for the employees. Excessive perks. Hiring external auditors...

As a auditor, I was assigned to a team to audit possible payroll fraud. The company...

As a auditor, I was assigned to a team to audit possible payroll fraud. The company we were auditing always handed the Friday payroll checks to the department supervisor to disburse. On this visit it was my responsibility to gather a signatures, verify the employee ID to the payroll register for the shipping/warehouse department. Paychecks were always presented at 9AM, so the employees were there to pick them up as we were told. This one department always had a high...

You are a staff auditor with Zubair Associates. Your audit team is in the planning stage...

You are a staff auditor with Zubair Associates. Your audit team is in the planning stage for Dhofar Cosmetics Inc., a beauty supply wholesaler. Describe the brainstorming process and types of issues that may be brought to the surface regarding your client.

a junior auditor working for ab Accounting Firm is included in the audit team engaging in...

a junior auditor working for ab Accounting Firm is included in the audit team engaging in the audit the Financial Reports of Complicated Ltd., a listed company on AST. When evaluating audit results for assets in the audit, Alexander has set the preliminary judgment about materiality to be $67,000. He then allocated the materiality to all the asset accounts. The account balances, performance materiality and estimated overstatements in the accounts are shown below: Account Account balance Performance materiality Estimate of...

You are a senior auditor of the accounting firm QTP Partners. Your audit team is currently...

You are a senior auditor of the accounting firm QTP Partners. Your audit team is currently planning the 2018 audit of GreenHome Limited, a medium sized listed company that manufactures and sells household appliances such as televisions, refrigerators and washing machines. The company has many stores in shopping centres across Australia. This is the second year your accounting firm is engaged to perform the audit for this client. The financial year under audit ends on 30th June 2019. Past audit...

Olivia Kirtley is an internal auditor in a small manufacturing company’s internal audit function. She recently...

Olivia Kirtley is an internal auditor in a small manufacturing company’s internal audit function. She recently completed a continuing professional education (CPE) course on statistical sampling. She applied her newly gained knowledge in the audit she is assigned. She used attribute sampling when she performed the test of controls over the company’s procurement transactions. Olivia figured that a tolerable deviation rate of 10 percent and a 5 percent risk of assessing control risk too low were appropriate for the tests...

In anticipation of an upcoming engagement, an internal audit team recently toured the company’s receiving, warehousing,...

In anticipation of an upcoming engagement, an internal audit team recently toured the company’s receiving, warehousing, and production facilities to obtain a better understanding of day-to-day operations. Listed below are selected items noted by the internal audit team during the tour: A large quantity of materials was sitting in a corner near the unloading docks. The receiving manager informed the audit team that the delivery trucks had already left. The materials had not yet been counted or inspected. One section...

Audit Sampling and Accounts Receivable Question 1 (9 marks) KPMG was the auditor for Xerox Corporation...

Audit Sampling and Accounts Receivable Question 1 KPMG was the auditor for Xerox Corporation between 1997 and 2000. During this time, approximately $6 billion of revenue was improperly classified and earnings were overstated by approximately $2 billion. When the fraudulent conduct was exposed, Xerox restated its financial statements and replaced KPMG as its auditor. KPMG paid $22.5 million to settle a lawsuit against the firm by regulators. Research this accounting fraud on the Internet for further details on what occurred....

You have recently joined the international audit team at a large company responsible for janitorial work...

You have recently joined the international audit team at a large company responsible for janitorial work at many different local businesses. Because of the significant number of consumables used in janitorial work, your company has a large purchasing department. You have been asked to analyze the purchases data set for potential frauds. Steps/Questions 6. Analyze the Product Price column from each company using Benford’s Law. Analyze only the first digit of the column. On average, do nay of the vendors...

You have recently joined the international audit team at a large company responsible for janitorial work...

You have recently joined the international audit team at a large company responsible for janitorial work at many different local businesses. Because of the significant number of consumables used in janitorial work, your company has a large purchasing department. You have been asked to analyze the purchases data set for potential frauds. Steps/Questions 5. Verify the values in the Quantity and Total columns. Are any missing or abnormal values present?

Subjects