Recent Question/Assignment

Question: Internal controls and tests of controls (8 marks)
Stanford-Brown University runs residential colleges on each of its five campuses spread all
over regional New South Wales. You are conducting the interim audit for the year ended 30
June 2020. The tangible fixed assets of each college are recorded in an asset register which is maintained at each college location by each college manager. The system operates as
described below.
1. In order to obtain new assets, a purchase requisition form is completed and approved
by the manager at each college.
2. The requisition is sent to the University’s Division of Finance, where the purchasing
officer checks the requisition for approval and completes a purchase order for the new
asset.
3. Assets costing more than $5,000 are approved by the financial accountant. All asset
purchases over $20,000 require the approval of the University’s Finance Director.
4. The purchase order is then sent to the supplier and a copy is sent to the Division of
Finance on the main Whoop Whoop campus.
5. The asset is received by the central store where the receiving clerk checks that all the
asset details agree with those on the receiving report and the copy of the purchase
order. The receiving clerk then issues the asset with its computer-generated
sequential barcode number. This barcode is fixed to the asset and written on the
receiving report and the supplier invoice.
6. The relevant college manager inputs the new asset details into the asset register using
a copy of the purchase order, the original requisition and the asset's barcode.
7. For disposal or write-off of an asset, an asset disposal write-off form is completed by
the relevant college manager, signed and sent to the Division of Finance. Disposals
and write-offs are approved by the financial accountant. A copy of the form is filed at
the Division of Finance and the approved original returned to the college manager for
action. The college manager then updates the fixed asset register for the subsequent
disposal.
8. The asset register is maintained on FARS - a tailored fixed assets computer system -
and reconciled to the general ledger by each college manager monthly.
9. The FARS system calculates depreciation automatically each month using the rate
input by the college manager at the time the asset was added to the register.
Required
1. Identify four internal control strengths on which you would rely on for your audit. (4
marks)
2. Design four tests of controls to evaluate the effectiveness of each control identified. (4
marks)
Question 3: Tests of transactions and balances (9 marks)
Phat Snax Ltd is a manufacturing company that sells biscuits and snack foods to a large
number of retailers nationally. You have turned your attention to the audit of inventory and
have obtained the following information from client staff:
1. Year-end inventory is expected to be as follows:
$000
Raw materials 850
Work in progress 525
Finished goods 1,005
2,380
2. The company uses standard costing to value its inventory, which consists of
approximately 150 product lines. At year-end, a relatively equal inventory value of
each of these lines will be held.
3. The inventory is stored in approximately fifty warehouses nationally. The company has
a policy of taking out short-term leases on unused warehouse space (to minimise
rental costs), so the number of warehouses in use varies over time.
4. Goods are manufactured centrally at the Kickatinalong factory and then shipped out
to the warehouses.
5. The recent launch of a new biscuit, Lamington Bix, resulted in poorer than expected
sales. Consequently, the company has excess inventory in finished goods, amounting
to $200,000. Their use-by date is 6 weeks after the reporting date.
6. A new work-in-process system was successfully introduced 2 months after the
previous year-end. Staff have commented on how this system is a great improvement.
7. Raw materials largely comprise bulk inventories of flour, rice, and potatoes. These are
held in large storage bins at the Kickatinalong factory.
8. Work in process largely includes biscuit dough, which is stored in several locations
throughout the Kickatinalong factory both in large sealed vats awaiting processing
and in mixing bowls attached to the ten different production lines.
9. As in previous years, all warehouses and the Kickatinalong factory will be closed at
reporting date to allow a full stocktake. A perpetual inventory system is used.
10. From your experience in previous years, you know that the company has a highly
accurate budgeting system. Final figures rarely vary more than 3% from budget.
Required
1. Identify and discuss the key financial statement assertions for the audit of inventory at
Phat Snax Ltd. Support your answer with reference to information in the question. (4.5
marks)
2. Identify the specific issues to be considered in relation to the existence and valuation
assertions for the audit of Phat Snax Ltd's inventory balance. Note that some specific
issues may be relevant to both assertions. Outline the audit procedures you would
undertake to cover these issues. (4.5 marks)

Editable Microsoft Word Document
Word Count: 1300 words including References


Buy Now at $19.99 USD
This above price is for already used answers. Please do not submit them directly as it may lead to plagiarism. Once paid, the deal will be non-refundable and there is no after-sale support for the quality or modification of the contents. Either use them for learning purpose or re-write them in your own language. If you are looking for new unused assignment, please use live chat to discuss and get best possible quote.

Looking for answers ?


Recent Questions

• Five moral dimensions of theinformation age: 1.Information rights and obligations 2.Property rights and obligations 3.Accountability and control 4.System quality 5.Quality of lifeQ: which do you think...Assessment detailsAssessment task 1 Practice scenarioTask Description This assessment provides opportunity to reflect on your practice with your fellow students through an online discussion group before...STAFFORDSHIRE UNIVERSITYSchool of Law, Policing & ForensicsSession: 2020/2021Semester: 01Module Code: LAWS40501Module Title: TORT LAW & CIVIL REMEDIESCredits: 30 Credits (50% Weighting)Due Date:...School of Law, Policing and ForensicsDepartment of LawSession 2021Semester: 1Stoke United, a local football club, wished to promote its image and so the Marketing Manager placed an advertisement in The...Module Title: Level 4: English Legal System and Legal SkillsAssignment: Written Assignment – Assessment 1 (Re-sit)Title:‘The sources of a law are those facts by virtue of which it is valid and which identify...My dissertation is about Image caption generator by means of deep learning.Below is the link what I want to make it as a project using flikr 8K dataset which is given there in the link:https://data-flair.training/blogs/python-based-project-image-caption-generator-cnn/Also...PROJECTUnit of Competency: BSBMGT517Unit Name: Manage operational planStudent Name:ASSESSMENT SUMMARYPart 1 SWOT snalysis / Strategic Plan Scenario 1: Analyse your market and prepare strategic goalsPart...Show All Questions