Решение задач по аудиту ACCA F8 Pilot paper Q4 SouthLea

Четвертое задание по аудиту "стоит" 20 марок и должно быть выполнено за 1,8*20 = 36 минут. Традиционно четвертое задание - это сценарий, по которому необходимо применить теоретические знания к конкретным специфическим условиям сценария.

Question 4 part a)

(i) Identify, and explain weaknesses in SouthLea Co's system of internal control over the wages system that could lead to misstatements in the fiancial statements.
(ii) For each weakness, suggest an internal control to overcome the weakness.

(8 marks, 1,8*8 = 14 minutes, 1 mark for indentifying each weakness and explanation its consequence and 1 mark to suggestion of control. Maximum 2 marks for each area)

Weaknesses		Consequence		Recommended control
Workers clock in by entering their unique number on a key pad.		It’s not supervised, then workers may swap numbers and clock in employees who are absent. SouthLea will then pay employees who have not worked.		Clocking in and out should be supervised by the foreman.
The foreman can issue temporary numbers for new empoyees.		The foreman may be able to issue a number for a fictitious employee and have waged paid into his own account.		The foreman must obtain authorisation to issue a new number from HR director. The issue of a new number should be backed up with the new employee's contract.
Overtime is not authorised before adding to standard pay.		Employees may claim for overtime that they have not worked.		The foreman must uathorised the list of overtime payments before adding it to the net pay.
The staff in the wages department can set up employee records wthout authorisation		The records may be set up for fictious employees whose wages are paid by cash to the clerks.		Any amendments to employee records must be authorised by the HR director and backed up with the employee contract. The HR director should review a weekly print out of amendments to ensure they are all reasonable and authorised.
Employees are paid in cash.		Cash is easy to misappropriate. Employees may claim that they didn't receive their payments as they are not expected to sign for their wage envelopes.		It's better to make the payments by trasfer. If not, a list of cash payments should be kept and employees should sign to say they have received their envelope.

Question 3 part b)

Compare the responsibilities of the external and internal auditors to detect frauds.
(6 marks, 1,8*6 = 10 minutes, 1 mark for each point)

Main reason of audit work

External audit		Internal audit
Primarly, the external auditor is resposible for the audit opinion on the financial statements. He or she focuses whether the financial statements provide the true and fair view. Therefore, the detection of fraud is not the main focus.		The main focus of the internal auditor is checking of corectness of internal control systems. Part of that work may be to conduct the review of control systems to ensure that the fraud is not taking place.

Materiality

External audit		Internal audit
The external auditor uses the materiality concept in his work. That means that he is not responsible for checking all transaction. Audit procedures are planned to detect the material fraud in reasonable level of assurance.		Internal auditor may perform the detailed review of transactions. He uses much lower materiality level. Therefore, it is more likely that internal auditor will detect the fraud from his audit testing.

Identification of fraud

External audit		Internal audit
If the external auditor detect the fraud, he needs to apply it for entire audit. Thus, he is responsible to extend testing in other areas because the audit risk increases.		Where the internal auditor detects the fraud, he may extend the testing in other areas. However, it is more likely, his work will focus on searching similar fraud in other locations.

Question 3 part c)

Explaine the factors that should be taken into consideration when appointing an external consultant.
(6 marks, 1,8*6 = 10 minutes, 1 mark for each point)

Use of expert

Qualification

The comsultant needs to have a relevant qualification to show the ability to undertake the work. The membership in Computer society or the Institute of internal auditors would be benefit.

Experience

The consultant should be able to have a relevant experience from previous projects. It may be an upgrading or amending wages system for other clients.

References

It's better that the consultant provides the references from other employers to prove the ability of undertaking this work.

Project management skills

The consultant needs to prove the skills to manage a team. It is needed to complete succesfully the wages system change project.

Access to information

The consultant will access to confidentioal information of SouthLee. The chif accountant needs to be ensure that this information will not be able to the third parties. Therefore, the consultant should sign the confidentiality contract.

Acceptance by other staff

The internal auditors may be threatened due to using the external expert. The Head of the Internal audit department needs to be sure that all staff understand the necessity of employing the consultant.