week one

Question 1

what are the requirements for an audit assignments according to the companies act 2006?

Answer 1

• £10.2 million in revenue
• £5.2 million in the balance sheet
• over 50 employees

Question 2

what is an audit assignment?

Answer 2

it is a systematic examination of books, documents, statutory records and accounts of a company to see if the financial report presents a fair and true value.

Question 3

what is a statutory auditors responsibility?

Answer 3

to make sure there is a level of independence

confirm that the directors report is consistent with the financial statement

to confirm the statements have been prepared according to the companies act 2006.

Question 4

why is an audit important?

Answer 4

to provide valuable information to: the government, investors, employees, suppliers, customers and the general public.

Question 5

what went wrong for the BHS case study?

Answer 5

dividends of £400 million were taken out until they were in large pension deficit until they couldn’t pay wages, keep up with going costs and couldn’t secure emergency fundings.

sales were not audited and the auditor didn’t even know about the transfer of ownership for the company.