Management Report

AA – L2 – Q69 – Audit Reports

Draft a management report addressing inventory and credit limit deficiencies at TechTrend Solutions, including implications and recommendations.

Question

TechTrend Solutions sells personal computers (PCs) to independent shops. You are the external auditor of TechTrend Solutions. Your interim audit revealed the following issues:

(1) The half-year physical inventory count revealed that some PCs supposed to be in inventory were missing and that other machines which had been returned by customers were in inventory but had not been recorded as having been returned. A few of the missing PCs have been traced to directors who borrowed them for use at home.

(2) Two customers had been allowed to exceed their credit limits and new customers in the last year had not been allocated credit limits.

Required:

Draft the section of your report to management dealing with the above deficiencies. Set out the deficiencies, their implications, and your recommendations for improvement.

Answer

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Topic: AUDIT REPORT

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

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

Topic: Reporting

AAA – L3 – Q57 – Reporting

Discuss deficiencies in database maintenance and advertising deals at Glenda Publishing, their consequences, and recommendations.

Question

57 Glenda Publishing
Described below are situations which have arisen at Glenda Publishing, a company involved in publishing activities.
(1) Database maintenance
Routine maintenance work is behind schedule resulting in a backlog of input for new subscriptions, cancellations, and changes of addresses.
(2) Advertising deals
As a result of staff shortages, some deals with advertisers are not being recorded and order confirmations are not being sent out.

Required:
For each situation, set out the deficiencies, their consequences, and your recommendations for improvement.

Answer

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Tags: Audit Deficiencies, Customer Goodwill, Internal controls, Management Report, Publishing Industry, Revenue Loss
Level: Level 3

Topic: Audit-Related Services

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AA – L2 – Q69 – Audit Reports

Draft a management report addressing inventory and credit limit deficiencies at TechTrend Solutions, including implications and recommendations.

AAA – L3 – Q65 – Reporting

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

AAA – L3 – Q57 – Reporting

Discuss deficiencies in database maintenance and advertising deals at Glenda Publishing, their consequences, and recommendations.

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AA – L2 – Q69 – Audit Reports

Draft a management report addressing inventory and credit limit deficiencies at TechTrend Solutions, including implications and recommendations.

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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"

AAA – L3 – Q57 – Reporting

Discuss deficiencies in database maintenance and advertising deals at Glenda Publishing, their consequences, and recommendations.

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