Fraud Risk – Knowsia

AAA – L3 – SA – Q5.7 – Audit evidence

Which statements about related party transactions are correct?

Question

Which of the following statements are correct?

1 With related party transactions, there is some risk of collusion and fraud.

2 A focus of audit attention with regard to related party transactions shall be on significant non-routine transactions.

A Statement 1 only is correct.

B Statement 2 only is correct.

C Both statements are correct.

D Neither statement is correct.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Disclosures, Fraud Risk, Non-routine transactions, Related Party Transactions
Level: Level 3

Topic: Audit Evidence

AAA – L3 – Q65 – Reporting

Prepare a management report on payroll internal control deficiencies at Bibini Co. Ltd., including implications and recommendations.

Question

Kofi & Co. have audited the annual financial statements of Akoma Co. Ltd., a public limited liability company, for the year ended 31st December 2014. The accounting system of the company is partially computerised.
During the audit, it was detected that just two members of staff, out of one hundred and fifty workers, were entirely and equally responsible for the maintenance of personnel records and preparation of the payroll. The chief accountant only confirms that the amount of the wages and salaries cheque agrees with the total of the net wages column in the payroll, then he signs without any reasonableness check of the amount of the total wages cheque. This situation is a serious deficiency in the system of internal control which can have serious implications. As audit senior, you are considering communicating this situation to the management, showing the deficiency, implications, and recommendations.

Required:
Prepare an appropriate report to management on the deficiency noted in the system of internal control for payroll.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Deficiency, Audit Procedures, Corporate Governance, Financial Statements, Fraud Risk, Internal Control, Management Report, Payroll, Recommendations, Risk Assessment
Level: Level 3

Topic: Reporting

AA – L2 – Q5 – Fraud and Error

Explain how internal audit helps manage fraud and error risks in an entity.

Question

(a) Explain how the internal audit function helps an entity with the risk of fraud and error.

(b) Explain the responsibilities of external auditors in respect of the risk of fraud and error in an audit of financial statements.

(c) SunCity Travel is an independent travel agency. It does not operate holidays itself. It takes commission on holidays sold to customers through its chain of high street shops. Staff are partly paid on a commission basis. Well established tour operators run the holidays that SunCity Travel sells. The networked reservations system through which holidays are booked and the computerised accounting system are both well-established systems used by many independent travel agencies.

Payments by customers, including deposits, are accepted in cash and by debit and credit card. SunCity Travel is legally required to pay an amount of money (based on its total revenue for the year) into a central fund maintained to compensate customers if the agency should cease operations.
Describe the nature of the risks to which SunCity Travel is subject arising from fraud and error.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Governance, Error Risk, Fraud Risk, Internal Audit
Level: Level 2

Topic: Fraud and Error

Tag (SQ): Fraud Risk

Filter by Professional Bodies

Filter by Subject

Filter by Topics

Filter by Levels

AAA – L3 – SA – Q5.7 – Audit evidence

Which statements about related party transactions are correct?

AAA – L3 – Q65 – Reporting

Prepare a management report on payroll internal control deficiencies at Bibini Co. Ltd., including implications and recommendations.

AA – L2 – Q5 – Fraud and Error

Explain how internal audit helps manage fraud and error risks in an entity.

Our offerings

Community

Contact Info

Customer

Get In Touch

Tag (SQ): Fraud Risk

Filter by Professional Bodies

Filter by Subject

Filter by Topics

Filter by Levels

AAA – L3 – SA – Q5.7 – Audit evidence

Which statements about related party transactions are correct?

You're reporting an error for "AAA – L3 – SA – Q5.7 – Audit evidence"

AAA – L3 – Q65 – Reporting

Prepare a management report on payroll internal control deficiencies at Bibini Co. Ltd., including implications and recommendations.

You're reporting an error for "AAA – L3 – Q65 – Reporting"

AA – L2 – Q5 – Fraud and Error

Explain how internal audit helps manage fraud and error risks in an entity.

You're reporting an error for "AA – L2 – Q5 – Fraud and Error"

Our offerings

Community

Contact Info

Customer

Get In Touch

admin

Pick a Form