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AA Question Rote > Substantive Procedures (4) > Flashcards

Substantive Procedures (4) Flashcards

1
Q

Allowance for trade receivables (Discuss director reasonableness)

A

Discuss with the finance director the rationale for not providing against any receivables and consider the reasonableness of the allowance.

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2
Q

Allowance for trade receivables (Breakdown opening recovered written)

A

Obtain a breakdown of the opening allowance of $125,000 and consider if the receivables allowed for in the prior year have been fully recovered, through the additional credit control procedures, or now fully written off.

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3
Q

Allowance for trade receivables (Aged slow moving controllers collected)

A

Inspect the aged trade receivables listing to identify any slow moving or old receivable balances and discuss the status of these balances with the credit controllers to assess whether they are likely to be collected.

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4
Q

Allowance for trade receivables (cash receipts slow moving)

A

Review whether there are any after-date cash receipts for identified slow moving/old receivable balances.

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5
Q

Allowance for trade receivables (customer correspondence balances allowance)

A

Review customer correspondence to identify any balances which are in dispute or unlikely to be paid and confirm if these were considered in determining the allowance

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6
Q

Allowance for trade receivables (minutes significant concerns assess allowance)

A

Inspect board minutes to identify any significant concerns in rela tion to payments by customers and assess if these have been considered when determining the allowance.

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7
Q

Allowance for trade receivables (recalculate receivables not recoverable compare)

A

Recalculate the potential level of trade receivables which are not recoverable and compare to allowance and discuss differences with management

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8
Q

Going concern (cashflow forecast)

A

Obtain the cash flow forecast and review the cash in and outflows. Assess the assumptions for reasonableness and discuss the findings with management to understand if the company will have sufficient cash.

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9
Q

Going concern (sensitivity)

A

Perform a sensitivity analysis on the cash flows to understand the margin of safety the company has in terms of its net cash in/outflow

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10
Q

Going concern (management future actions)

A

Evaluate management’s plans for future actions, including contingency plans for financing and plans for generating revenue, and consider the feasibility of these plans.

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11
Q

Going concern (agreements covenants)

A

Review any agreements with the bank to determine whether any covenants have been breached

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12
Q

Going concern (correspondence renewing overdraft)

A

Review any bank correspondence to assess the likelihood of the bank renewing the overdraft facility

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13
Q

Going concern (post-year-end legal action)

A

Review post-year-end correspondence with suppliers to identify if any have threatened legal action or any others have refused to supply goods

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14
Q

Going concern (lawyers litigation)

A

Enquire of the lawyers of Marlin Co regarding the existence of any litigation

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15
Q

Going concern (board difficulties)

A

Review the post-year-end board minutes to identify any other issues which might indicate further financial difficulties for the company

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16
Q

Going concern (basis appropriate FSs)

A

Conclude whether the going concern basis is appropriate for the preparation of the financial statements

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17
Q

Going concern (written representation)

A

Obtain management’s written representation that Marlin Co is a going concern.

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18
Q

Receivables accuracy, valuation and allocation (cash receipts pre receivables)

A

Review the after date cash receipts and trace to pre-year-end receivable balances.

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19
Q

Receivables accuracy, valuation and allocation (aged receivables report)

A

Inspect the aged receivables report to identify any slow-moving balances, discuss these with the credit control manager to assess whether an allowance or write down is necessary.

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20
Q

Receivables accuracy, valuation and allocation (customer correspondence dispute)

A

For any slow moving/aged balances review customer correspondence to assess whether there are any invoices in dispute.

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21
Q

Receivables accuracy, valuation and allocation (board minutes)

A

Review board minutes of Dashing Co to assess whether there are any material disputed receivables.

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22
Q

Receivables completeness (GDN sales invoices)

A

Select a sample of goods despatched notes from before the year end, agree to sales invoices and to inclusion in the detailed sales listing and trade receivables account before the year end.

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23
Q

Receivables completeness (customer balances agree)

A

Agree the total of the list of individual customer balances to the aged receivables listing and to the trial balance

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24
Q

Receivables completeness (prior year aged receivables)

A

Obtain the prior year aged receivables listing and for significant balances compare to the current year receivables listing for inclusion and amount due

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25
Q

Receivables completeness (customer credit balances)

A

Review the list of individual customer balances for any credit balances and discuss with management whether these should be reclassified as payables.

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26
Q

Receivables rights and obligations (bank confirmations evidence security owed)

A

Review bank confirmations and loan agreements for any evidence that trade receivables have been assigned as security for amounts owed by Dashing Co

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27
Q

Receivables rights and obligations (board minutes evidence third)

A

Review board minutes for evidence that legal title to receivables has been sold onto a third party (e.g. a factor)

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28
Q

Receivables rights and obligations (individual customers balance sales orders)

A

For a sample of individual customers, agree the make-up of the balance per the listing to sales orders or a contract in the original name of the customer.

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29
Q

Redundancy provision (directors present obligation)

A

Discuss with the directors of Dashing Co whether they have formally announced their intention to close the production site and make their employees redundant, to confirm that a present obligation exists at the year end.

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30
Q

Redundancy provision (announced year supporting documentation decision)

A

If announced before the year end, review supporting documentation to verify that the decision has been formally announced.

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31
Q

Redundancy provision (board minutes probable)

A

Review the board minutes to ascertain whether it is probable that the redundancy payments will be paid.

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32
Q

Redundancy provision (breakdown employee completeness TB)

A

Obtain a breakdown of the redundancy calculations by employee and cast it to confirm completeness and agree to trial balance.

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33
Q

Redundancy provision (recalculate provision completeness)

A

Recalculate the redundancy provision to confirm completeness and agree components of the calculation to supporting documentation such as employee contracts

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34
Q

Redundancy provision (post-year-end redundancy)

A

Review the post-year-end cash book to identify whether any redundancy has been paid; compare actual payments to the amounts provided to assess whether the provision is reasonable

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35
Q

Redundancy provision (representation)

A

Obtain a written representation from management to confirm the completeness of the provision

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36
Q

Redundancy provision (review disclosure)

A

Review the disclosure of the redundancy provision to confirm compliance with IAS 37® Provisions, Contingent Liabilities and Contingent Assets.

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37
Q

Completeness trade payables and accruals (payables prior)

A

Compare the total trade payables and list of accruals against prior year and investigate any significant differences.

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38
Q

Completeness trade payables and accruals (post-year-end book listing)

A

Select a sample of post-year-end payments from the cash book; if they relate to the current year, trace to the detailed purchase listing or accruals listing to confirm they are recorded in the correct period.

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39
Q

Completeness trade payables and accruals (supplier statements balances)

A

Obtain supplier statements and reconcile these to the list of individual suppler balances, and investigate any reconciling items

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40
Q

Completeness trade payables and accruals (circularisation)

A

If supplier statements are not received by Airsoft Co, select a sample of suppliers and request. Follow up any non-replies and any reconciling items between the balance confirmed and the balance per the list of individual suppliers.

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41
Q

Completeness trade payables and accruals (invoices credit notes)

A

Review after date invoices and credit notes to confirm no further items need to be accrued.

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42
Q

Year-end bank balances (bank confirmation all)

A

Obtain a bank confirmation letter from Airsoft Co’s bankers for all of its bank accounts.

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43
Q

Year-end bank balances (bank confirmation reconciliations TB)

A

Agree all accounts listed on the bank confirmation letter to Airsoft Co’s bank reconciliations and the trial balance to confirm completeness of bank balances

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44
Q

Year-end bank balances (balance confirmation bank statement)

A

Agree the balance per the bank reconciliation to an original year-end bank statement and to the bank confirmation letter

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45
Q

Year-end bank balances (lodgements)

A

Trace all the outstanding lodgements to the pre-year-end cash book, post-year-end bank statement and also to the paying-in-book before the year end

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46
Q

Year-end bank balances (Trace unpresented cheques)

A

Trace all unpresented cheques to a pre-year-end cash book and post-year-end statement. For any unusual amounts or significant delays, obtain explanations from management.

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47
Q

Year-end bank balances (Examine unpresented cheques)

A

Examine any old unpresented cheques to assess if they need to be written back to the individual suppliers’ balances as they are no longer valid to be presented.

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48
Q

Year-end bank balances (unusual items)

A

Review the cash book and bank statements for any unusual items or large transfers around the year end, as this could be evidence of window dressing.

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49
Q

Year-end bank balances (review FSs)

A

Review the financial statements to confirm that the disclosure of bank balances is complete and accurate

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50
Q

Director’s renumeration (schedule split)

A

Obtain a schedule of the directors’ remuneration, split by salary and bonus paid in April and cast the schedule to confirm accuracy

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51
Q

Director’s renumeration (individual salary)

A

Agree a sample of the individual monthly salary payments and the bonus payment in April to the payroll records

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52
Q

Director’s renumeration (bonus paid statements)

A

Confirm the amount of each bonus paid by agreeing to the cash book and bank statements.

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53
Q

Director’s renumeration (board minutes)

A

Review the board minutes to identify whether any additional payments relating to this year have been agreed for any directors

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54
Q

Director’s renumeration (amounts paid genuine)

A

Agree the amounts paid per director to board minutes to confirm the sums included are genuine.

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55
Q

Director’s renumeration (written representation)

A

Obtain a written representation from management confirming the completeness of directors’ remuneration including the bonus

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56
Q

Director’s renumeration (disclousres legislation)

A

Review the disclosures regarding the directors’ remuneration and assess whether they comply with local legislation

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57
Q

Inventory valuation (breakdown WIP percentage)

A

Obtain the breakdown of WIP and agree a sample of WIP assessed during the inventory count to the WIP schedule, agreeing the percentage completion to that recorded at the inventory count.

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58
Q

Inventory valuation (cost sheets PI, labour costs)

A

For a sample of inventory items (finished goods and WIP), obtain the relevant cost sheets and agree raw material costs to recent purchase invoices, labour costs to time sheets or payroll records and confirm overheads allocated are of a production related nature.

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59
Q

Inventory valuation (credit notes)

A

Examine post-year-end credit notes to determine whether there have been returns which could signify that a write down is required.

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60
Q

Inventory valuation (finished goods sales invoices NRV)

A

Select a sample of year-end finished goods and compare cost with post-year-end sales invoices to ascertain if net realisable value (NRV) is above cost or if an adjustment is required.

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61
Q

Inventory valuation (basis valuation)

A

Discuss the basis of WIP valuation with management and assess its reasonableness.

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62
Q

Inventory valuation (aged inventory)

A

Review aged inventory reports to identify any slow-moving goods and discuss with management why these items have not been written down or if an allowance is required.

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63
Q

Inventory valuation (defective board minutes)

A

For the defective batch of product Crocus, review board minutes and discuss with management their plans for selling these goods

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64
Q

Inventory valuation (post-year-end NRV)

A

If any Crocus products have been sold post-year end, review the sales invoice to assess NRV

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65
Q

Research and development (schedule intangible)

A

Obtain and cast a schedule of intangible assets, agree the closing balances to the general ledger, trial balance and draft financial statements

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66
Q

Research and development (finance dierctor rationale)

A

Discuss with the finance director the rationale for the four-year useful life and consider its reasonableness.

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67
Q

Research and development (recalculate amortisation expense)

A

Recalculate the amortisation expense for a sample of intangible assets which have commenced production and confirm that it is in line with the amortisation policy of straight line over four years

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68
Q

Research and development (new projects discuss details)

A

For the three new computing software projects, discuss with management the details of each project along with the stage of development and whether it has been capitalised or expensed

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69
Q

Research and development (expensed research)

A

For those expensed as research, agree the costs incurred to invoices and supporting documentation and to inclusion in profit or loss

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70
Q

Research and development (capitalised invoices)

A

For those capitalised as development, agree costs incurred to invoices

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71
Q

Research and development (feasibility)

A

Confirm technically feasible and intention to complete the project by discussion with development managers or review of feasibility reports

72
Q

Research and development (market research)

A

Review market research reports to confirm Hyacinth Co has the ability to sell the product once complete and probable future economic benefits will arise.

73
Q

Research and development (review disclosure verify)

A

Review the disclosures for intangible assets in the draft financial statements to verify that they are in accordance with IAS 38® Intangible Assets.

74
Q

Sales tax liability (TB tax authority)

A

Agree the year-end sales tax liability in the trial balance to the tax return/reconciliation submitted to the tax authority and cast the return/reconciliation

75
Q

Sales tax liability (Recalculate payable authority)

A

Recalculate the amount payable to the tax authority as sales tax charged less sales tax incurred.

76
Q

Sales tax liability (liability prior year balance)

A

Compare the year-end sales tax liability to the prior year balance or budget and investigate any significant differences.

77
Q

Sales tax liability (post-year-end outstanding)

A

Agree the subsequent payment to the post-year-end cash book and bank statements to confirm completeness and that it has been paid in line with the terms of the tax authority.

78
Q

Sales tax liability (correspondence authority outstanding)

A

Review any current and post-year-end correspondence with the tax authority to assess whether there are any additional outstanding payments due. If so, confirm they are included in the year-end liability.

79
Q

Sales tax liability (disclosure liability current liability)

A

Review any disclosures of the sales tax liability to confirm it is shown as a current liability and assess whether disclosures comply with IFRS Accounting Standards and legislation.

80
Q

Damaged PPE (schedule PPE NCA register)

A

Obtain a schedule itemising the damaged PPE and agree the net book value to the non-current assets register to confirm the total value of affected assets

81
Q

Damaged PPE (review condition PPE identified)

A

Review the condition of other PPE and inventory to confirm all damaged assets identified.

82
Q

Damaged PPE (zero scrap value)

A

Review the damaged PPE and inventory and discuss with management the basis for the zero scrap value assessment

83
Q

Damaged PPE (adjusting or non-adjusting)

A

Discuss with management whether they will disclose the effect of the flood, as a non-adjusting event, in the year-end financial statements.

84
Q

Vehicle additions and disposals (schedule vehicles)

A

Cast the schedule of additions to vehicles, cast it and agree the total to the disclosure note for property, plant and equipment.

85
Q

Vehicle additions and disposals (new vehicles cost of PI)

A

For a sample of new vehicles on the schedule of additions agree the cost to the purchase invoice

86
Q

Vehicle additions and disposals (Physically inspect)

A

Physically inspect a sample of additions, confirming that the registration number of the vehicle agrees to that on the NCA register

87
Q

Vehicle additions and disposals (Old removed new)

A

Review the non-current assets register to confirm that the 20 old vehicles were removed and that the 20 new vehicles were included

88
Q

Vehicle additions and disposals (Agree cash payment)

A

Agree the cash payment of $3.9m to the cash book and bank statement.

89
Q

Vehicle additions and disposals (Recalculate depreciation confirm)

A

Recalculate the depreciation expense, confirming that the depreciation expense was based on the old vehicles until 1 February and on the cost of the new vehicles after that date

90
Q

Vehicle additions and disposals (disposal review depreciation)

A

Review depreciation rates on existing vehicles to establish if the carrying amount of other vehicles may be overstated.

91
Q

Vehicle additions and disposals (disposal management replacement useful)

A

Discuss with management Encore Co’s history of vehicle replacement to establish whether vehicles are used for the entire period of their estimated useful life

92
Q

Vehicle additions and disposals (trade-in allowances carrying)

A

Discuss with management why trade-in allowances were so much lower than the carrying amounts of the vehicles to provide further evidence on the reasonableness of the depreciation policies.

93
Q

Vehicle additions and disposals (review FSs disclosures)

A

Review the notes to the financial statements to confirm that disclosure of the additions and disposals complies with IAS® 16 Property, Plant and Equipment.

94
Q

Potential breach of regulations (correspondence authority number)

A

Review correspondence with the transport authority to establish details of the complaint and the number of times the breach has allegedly occurred.

95
Q

Potential breach of regulations (enquire directors breaches)

A

Enquire of the directors why they are unwilling to provide or make disclosure, whether they accept that any breaches took place but believe that the effect is immaterial or whether they dispute their occurrence

96
Q

Potential breach of regulations (record driving likelihood breaches)

A

Review Encore Co’s policies and procedures to record driving hours and rest periods and compare to the regulations to determine the likelihood that breaches have occurred and how frequently

97
Q

Potential breach of regulations (correspondence legal advisers)

A

Review correspondence with Encore Co’s legal advisers or, with the client’s permission, contact the lawyers to enquire into their assessment of the likelihood that the breach may be proven and any fines that could be payable

98
Q

Potential breach of regulations (board minutes likelihood payment)

A

Review the board minutes to ascertain management’s view as to the likelihood of payment to the transport authority

99
Q

Potential breach of regulations (written representation effect laws)

A

Obtain a written representation to the effect that the directors are not aware of any other breaches of laws or regulations that would require a provision or disclosure in the financial statements

100
Q

Potential breach of regulations (post-year-end book statements)

A

Inspect the post-year-end cash book and bank statements to identify whether any fines have been paid

101
Q

Income (schedule completeness TB balance)

A

Obtain a schedule of all Vega Vista Co’s income and cast to confirm completeness and accuracy of the balance and agree to the trial balance.

102
Q

Income (categories prior years)

A

Compare the individual categories of income of festival ticket sales, sundry sales and donations against prior years and investigate any significant differences

103
Q

Income (proof-in-total differences)

A

Construct a proof-in-total calculation of the number of tickets sold, approximately 15,000, multiplied by the ticket price of $35. Compare this to the income recorded and discuss any significant differences with management

104
Q

Income (advance deferred)

A

Discuss with management their procedures for ensuring advance ticket sales for the September 20X5 festival are excluded from income and instead recognised as deferred income in the statement of financial position

105
Q

Income (monthly donations)

A

Trace a sample from sign up documentation to the bank statements, cash book and income listing to confirm complete and accurate recording.

106
Q

Income (journal deferred income prior-year)

A

Agree the journal entry transferring prior-year deferred income for the 20X4 festival to current year income to the general ledger and agree amounts to prior-year financial statements.

107
Q

Restructuring provision (breakdown provision TB)

A

Cast the breakdown of the restructuring provision to the calculation is correct and agree the total to the trial balance

108
Q

Restructuring provision (Board minutes restructure)

A

Review the board minutes where the decision to restructure the production process was taken and confirm this was in March 20X5.

109
Q

Restructuring provision (Announcement shareholders before)

A

Review the announcement to shareholders and employees in late March, to confirm that this was announced before the year end

110
Q

Restructuring provision (Breakdown expenditure)

A

Obtain a breakdown of the restructuring provision and confirm that only direct expenditure relating to the restructuring is included

111
Q

Restructuring provision (Retraining costs)

A

Review the expenditure to confirm that no retraining costs of existing staff included

112
Q

Restructuring provision (Costs included agree)

A

For the costs included within the provision, including acquisitions of plant and machinery, agree to supporting documentation, such as purchase invoices, to confirm validity of items included

113
Q

Restructuring provision (Post-year-end provision reasonable)

A

Review post-year-end payments/invoices relating to the expenditure and compare the actual costs incurred to the amounts provided to assess whether the amount of the provision is reasonable

114
Q

Restructuring provision (Written representation announcement)

A

Obtain a written representation confirming management discussions in relation to the announcement of the restructuring and to confirm the completeness of the provision

115
Q

Restructuring provision (Adequacy disclosures IAS 37)

A

Review the adequacy of the disclosures of the restructuring provision in the financial statements and assess whether these comply with IAS® 37

116
Q

Bank loans (opening and closing)

A

Obtain a schedule of opening and closing loans detailing any changes during the year. Cast the schedule to confirm its accuracy and agree the closing balances to the trial balance and draft financial statements

117
Q

Bank loans (loan agreement borrowed repayment)

A

For the new loan taken out in the year, review the loan agreement to confirm the amount borrowed, the repayment terms and the interest rate applicable.

118
Q

Bank loans (loan proceeds cash book)

A

For the new loan taken out in the year, agree the loan proceeds of $4.8m per the loan agreement to the cash book and bank statements.

119
Q

Bank loans (recalculate loan)

A

Recalculate the split of the loan repayment on 31 March 20X5 between interest and principal, recalculate interest and agree to inclusion in statement of profit or loss

120
Q

Bank loans (bank correspondence settlement charges)

A

Review the bank correspondence and loan agreements for confirmation of any early settlement charges incurred on the loans repaid. Agree that these were expensed to the statement of profit or loss as a finance expense.

121
Q

Bank loans (review agreement covenants)

A

Review all loan agreements for details of covenants and recalculate all covenants to identify any potential or actual breaches.

122
Q

Bank loans (disclosure non-current accordance IFRS)

A

Review the disclosure of non-current liabilities in the draft financial statements, including any security provided and assess whether these are in accordance with IFRS Accounting Standards and local legislation

123
Q

Faulty inventory (breakdown goods customers)

A

Obtain a breakdown of the damaged goods held in inventory and returned from customers and cast to confirm its accuracy

124
Q

Faulty inventory (sample basis breakdown documentation)

A

Agree on a sample basis the returns from customers as per the breakdown back to sales returns documentation to confirm the existence of the quantities returned

125
Q

Faulty inventory (discuss status line damage)

A

Discuss with management the current status of their plans for this product line and whether they are able to rectify the damage and then sell the goods on

126
Q

Faulty inventory (inventory sales invoices NRV)

A

If the damaged inventory has been rectified and sold after the year end, agree to the sales invoice to assess NRV in line with the new cost of the product

127
Q

Faulty inventory (damaged goods documentation)

A

Agree the cost of damaged goods to supporting documentation to confirm the raw material cost, labour cost and any overheads attributed to the cost.

128
Q

Faulty inventory (discuss management written)

A

Discuss with management if the goods have been written down; if so, trace the write down to the inventory valuation to confirm.

129
Q

Faulty inventory (meeting minutes resale)

A

Inspect monthly board meeting minutes from April 20X5 onwards to obtain further information regarding the faulty paint and its possible resale value

130
Q

Revenue (compare prior years)

A

Compare total revenue against prior years and budget for the year and investigate any significant fluctuations.

131
Q

Revenue (schedule categories breakdown)

A

Obtain a schedule of sales for the year broken down into the main product categories and compare this to the prior year breakdown and for any unusual movements, discuss with management

132
Q

Revenue (sales invoices master data invoices)

A

Select a sample of sales invoices for customers and agree the sales prices back to the price list or customer master data information to confirm the accuracy of invoices.

133
Q

Revenue (gross profit margin)

A

Calculate the final gross profit margin for Darjeeling Co and compare this to the prior year and investigate any significant fluctuations.

134
Q

Revenue (recalculate discounts)

A

For a sample of invoices, recalculate invoice totals including discounts and sales tax.

135
Q

Revenue (sample credit notes removed)

A

Select a sample of credit notes raised, trace to the original invoice and ensure the invoice has been correctly removed from sales.

136
Q

Revenue (despatch period cut-off)

A

Select a sample of pre- and post-year-end despatch notes and trace to sales invoices in the correct accounting period to verify that cut-off is accurate.

137
Q

Revenue (price promise refund)

A

For sales under the price promise, compare the level of claims to date with the refund liability recognised and assess whether it is reasonable

138
Q

Disposals of PPE (breakdown NCA register)

A

Obtain a breakdown of disposals, cast the list and review the non-current assets register to confirm that all assets have been removed

139
Q

Disposals of PPE (sample proceeds documentation)

A

Select a sample of disposals and agree sale proceeds to supporting documentation such as sundry sales invoices.

140
Q

Disposals of PPE (recalcualte disposal)

A

Recalculate the profit/loss on disposal and agree to the trial balance and statement of profit or loss

141
Q

Disposals of PPE (recalcuate expense calculations basis)

A

Recalculate the depreciation expense for a sample of disposals to confirm the calculations are correctly applied as per the company policy of a pro rata basis or a full year in the year of acquisition and none in the year of disposal.

142
Q

Disposals of PPE (disclosure disposals FSs)

A

Review the disclosure of the disposals in the draft financial statements and ensure it is in line with IAS 16 Property, Plant and Equipment.

143
Q

Redundancy costs (board minutes discontinue)

A

Review the board minutes for evidence of the decision to discontinue the brand of chemicals before the year end.

144
Q

Redundancy costs (documentation confirm discontinue)

A

Review supporting documentation to confirm that the decision to discontinue the brand was notified to the four members of staff before the year end.

145
Q

Redundancy costs (recalculate completeness documentation)

A

Recalculate the redundancy provision to confirm completeness and agree components of the cost to supporting documentation such as employee contracts

146
Q

Redundancy costs (representation confirming costs)

A

Obtain a written representation from management confirming the completeness of the costs.

147
Q

Redundancy costs (review disclosures IAS 37)

A

Review the disclosures included in the financial statements to confirm compliance with requirements of IAS 37

148
Q

Director’s bonus (schedule cast accuracy)

A

Obtain a schedule of the directors’ bonus and cast the schedule to confirm its accuracy. Agree the amount to that disclosed in the financial statements.

149
Q

Director’s bonus (review current bonus liability)

A

Review the schedule of current liabilities and confirm the bonus accrual is included as a year-end liability.

150
Q

Director’s bonus (bonus payments payroll)

A

Agree the individual bonus payments to the post-year-end payroll records

151
Q

Director’s bonus (post-year-end bank)

A

Confirm the amount of each bonus paid by agreeing to the post-year-end cash book and bank statements

152
Q

Director’s bonus (board minutes additional)

A

Review the board minutes to identify whether any additional payments relating to this year have been agreed for any directors

153
Q

Director’s bonus (written representation renumeration)

A

Obtain a written representation from management confirming the completeness of directors’ remuneration including the bonus.

154
Q

Director’s bonus (review disclosures directors)

A

Review the disclosures relating to the bonus paid to directors and assess whether they comply with local legislation

155
Q

Purchases (profit compare)

A

Calculate the operating profit and gross profit margins and compare them to last year and budget and investigate any significant differences.

156
Q

Purchases (review fluctuations management)

A

Review monthly purchases and other expenses to identify any significant fluctuations and discuss with management

157
Q

Purchases (recalculate PI expense nominal)

A

Recalculate the accuracy of a sample of purchase invoice totals and related taxes and confirm expense has been included in the correct nominal code

158
Q

Purchases (recalculate prepayments confirm expenses)

A

Recalculate the prepayments and accruals at the year end to confirm the accuracy of the expenses included in the statement of profit or loss

159
Q

Purchases (sample GRNs listing period)

A

Select a sample of GRNs just before and after the year end; agree to the detailed purchases listing to confirm the expense is recorded in the correct accounting period.

160
Q

Purchases (sample payments book expense account classified)

A

Select a sample of payments from the cash book and trace to expense account to confirm the expense has been included and classified correctly.

161
Q

Employment income tax payable (compare payable year)

A

Compare the accrual for income tax payable to the prior year, investigate any significant differences.

162
Q

Employment income tax payable (general ledger records accuracy)

A

Agree the year-end income tax payable accrual to the general ledger and payroll records to confirm accuracy.

163
Q

Employment income tax payable (calculation unexpected variances)

A

Re-perform the calculation of the accrual to confirm accuracy and discuss any unexpected variances with management

164
Q

Employment income tax payable (agree payment post completeness)

A

Agree the subsequent payment to the post-year-end cash book and bank statements to confirm completeness

165
Q

Employment income tax payable (review correspondence auhtorities outstanding)

A

Review any correspondence with tax authorities to assess whether there are any additional outstanding payments due; if so, agree they are included in the year-end accrual

166
Q

Employment income tax payable (disclosures IFRS legislation)

A

Review any disclosures regarding the income tax accrual and assess whether they comply with IFRS Accounting Standards and legislation.

167
Q

Inventory count attendance (prior papers)

A

Review prior year working papers for known problems

168
Q

Inventory count attendance (audit staff)

A

Schedule audit staff to attend the inventoru counts

169
Q

Inventory count attendance (instructions)

A

Obtain a copy of inventory count instructions from the client

170
Q

Inventory count attendance (3rd party)

A

Ascertain whether any inventory is held by third parties

171
Q

Inventory count attendance (audit programme)

A

Prepare the audit programme for attendance at the count

172
Q

Purchases (profit compare prior)

A

Calculate operating profit and gross profit margin and compare to prior year and to budget and investigate any significant differences

173
Q

Purchases (post-year invoices current)

A

Select a post-year-end expense invoices and ensure that any expenses relating to the current year have been accrued

174
Q

Purchases (review purchases investigate)

A

Review annual purchases and other expenses on a line-by-line basis, compare to prior year and investigate any significant differences

175
Q

Purchases (recalculate PI expense correctly)

A

Recalculat ethe accuracy of a sample of purchase invoice totals and relaterd taxes and confirm that expense has been correctly included in general ledger

176
Q

Purchases (GRNs year end listing)

A

Select a sample of GRNs immediately before and after the year end. Agree to the detailed purchase listing to ensure expense is recorded in correct accounting period

AA Question Rote (30 decks)

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