1. Hans Ltd, a reporting entity, uses last-in first-out in respect of valuation of closing inventories, which is one of the most significant balance sheet accounts. The difference between first-in first-out and
last-in first-out has an effect on the closing inventory balance.
What would you do in this case? What type of audit opinion would you issue? Explain. (5 marks)
2. The financial year of Adrian Ltd ended on 30 June 201X. You signed the auditor’s report on 25 August and the financial statements were issued on 10 September.
On 1 August, a lawsuit was filed against Adrian Ltd for damages that allegedly occurred before 30 June. In the opinion of the company’s lawyers, there is a danger of a significant loss.
What is your responsibility in relation to the above event? Explain. (5 marks)
Question 4 (12 marks)
Roma Ltd is a well-known Australian retailer.
The company has branches across Australia. One of its branches is managed by the wife of one of Roma Ltd’s directors.
This year, the company’s senior management has offered large bonuses to managers to meet financial targets. The directors have reported that it has been another good year for the organisation and that they
expect the coming year to be successful. However, the whole retail industry has experienced some economic difficulties lately.
You are planning the audit of Roma Ltd for the year ended 30 June 2018.
Question 4 – continued
The draft income statement for 2018 together with audited figures for 2017 is given below:
30 June 2017 30 June 2018
Income statement (actual ) (draft)
Revenue $1 234 280 $1 073 988
Cost of sales (605 576) (644 374)
Gross profit 628 704 429 614
Other income 14 372 —
Administration (184 128) (190 876)
Selling and distribution (159 866) (101 150)
Finance costs (15 246) (14 868)
Profit/(loss) before tax 283 836 122 720
Based on the above information, discuss the issues that you will consider in your audit planning. Show all supporting calculations. (12 marks)
Question 5 (8 + 4 + 4 + 4 + 4 + 6 = 30 marks)
1. You are in the planning stage of the audit of Swans Ltd.
The company’s revenue for the year is $50 million and profits are $6 million.
A long-standing customer has made a claim against Swans Ltd for breach of contract. They claim that products were not delivered in accordance with the contract and this led to them having to engage other
contractors to carry out the work at great expense. The customer is suing the company for damages of $2 million.
So far, you have collected mainly electronic evidence relevant to the case.
Required: Describe substantive procedures that would provide sufficient appropriate evidence in relation to the above issue. (8 marks)
2. Briefly discuss two benefits to the auditor from using statistical sampling. (4 marks)
3. Briefly explain the difference between selective testing and stratification in selecting items for audit testing. (4 marks)
4. What is your view on “giving the role of appointing auditors to ASIC”? Explain. (4 marks)
Question 5 – continued
5. Explain what is meant by ‘cut-off’ and why it is important to auditors in establishing the fairness of financial statements. (4 marks)
6. Briefly explain the benefits and the limitations of a financial report audit. (6 marks)
Question 6 (13 marks)
CORE- 8 is an exclusive members-based health club. The club income comes from subscriptions from club members as well as charging for equipment rentals.
You are planning the audit for the year ended 30 June 2018 and are considering the completeness of income. You have noticed some irregularities in invoicing and cash collection procedures.
Club membership and subscription details are as follows:
According to the last annual report, the club had 320 members. This financial year, while 22 members did not renew their membership, the club gained 42 new members who signed up from 1 July 2017. In addition
to this, 21 new members joined halfway through the year and 10 new members joined in the last 3 months of the year.
Subscriptions are due for the year from July to June. For the year 2018, the subscription was set at $2 000 per member.
Equipment rentals are made to both members and non-members. The rentals amount to $500 per month per person. The rental accounts remain unpaid for 26 non-members. All overdue accounts are charged an interest
rate of 10% per year.
Explain how analytical procedures can be used to audit revenue. Show all supporting calculations. (13 marks)
Distributed: Mon, 11 Sep 2017 File History of the organization History of Logo Organization Officers Corporate Organization Chart Organization Business private concern Office Proficient Industry Accomplishments Why Canon is a Groundbreaking brand? Picture Gallery References History of Company. The organization was begun in 1930's. Presently this organization is one of the worldwide pioneers and the best market pioneers in cameras, camcorders, printers and optical items. In past this organization was initially named Seikikogaku Kenkyasho, which means accuracy optical industry. The established by Takeshi Mitharai, Goro Yoshida, Saburo Uchida and Takeo Maeda. Originators' objective was to make Japan's first-since forever 35mm camera with central plane shade At the point when these four organizers couldn't buy any important hardware, they made a camera with Nikon Corporation. They incorporate Nikon focal points for the Canon cameras. Group made their first model of a camera without precedent for Japan. It was named as Kwanon. Throughout the years, the name changed from that point to standard camera Co Inc. lastly Canon Inc. in the 1960s. F:NSBMAssignmentsCanon ResearchImaages With Referanceswww.robgalbraith.comCanon Company dependably put stock in weighty developments. They began to thoroughly considering of the case and they constantly connected their things in light of future, in this manner brand and business began developing quickly. Standard began to take once again the market. This organization was dependably the first to dispatch something new to the world. After the group establishment was set up in the long run. F:NSBMAssignmentsCanon ResearchImaages With ReferancesKwanon_anniversary_Kwanon_1934_image_Final.jpegIn 1934:- Canon make their first Camera Product, 35mm central plane-shade camera. In 1935:- Their organization enrollment with the trademark. In 1936:- They present their 35 mm central plane-shade camera to the market. In 1937:- Precision Optical Industry, Co., Ltd. is established. In 1939:- In-House creation of Serenar Lens started. F:NSBMAssignmentsCanon ResearchImaages With Referances1937_x_s_l.jpgIn 1940:- Japan's first backhanded X-beam Camera is created by Canon. F:NSBMAssignmentsCanon ResearchImaages With ReferancesTakeshi_Mitarai.jpgIn 1942:- Takeshi Mitarai is named as leader of Precision Optical Industry, Co., Ltd. In 1945:- They began to make midrange J ll central plane-shade camera. In 1946:- The Ginza Camera Service Station opens and Canon Sll is presented. In 1947:- The Company progressed toward becoming Canon Camera Co. Inc. also, Japan government gave their need to ordinance when Japan continued fare exercises. In 1949:- In this year group ll B camera discharged. In 1951:- Serenar 50mm f/1.8 focal point is presented. F:NSBMAssignmentsCanon ResearchImaages With Referancessere_50_18.jpg F:NSBMAssignmentsCanon ResearchImaages With Referances1954_4sb_k.jpgIn 1952:- They propelled the IV sb camera. In 1954:- They enhanced IV sb before the deal next stock. In 1955:- Cine 8T Movie Camera advancement started in this year. Furthermore, they opened New York branch Office. In 1956:- They discharged Canon First 8mm Movie camera Cine 8T. In 1957:- Canon Europa, is set up in Geneva. In 1958:- They presented zoom focal point for TV broadcasting. In 1959:- They presented their first SLR camera Canon Flex. What's more, Canon Reflex Zoom 8 was conceived. In 1960:- They built up an attractive set out toward use in VTrs. What's more, they entered the market for attractive heads. In 1962:- They built up their multi year plan section into the business machine advertise. Also, they built up the R focal point for SLR cameras. In 1963:- They began their chips away at optical fiber advancement. Also, they presented X-beam reflect camera. In this year they presented "Standard Demi" take camera. In 1964:- this year FL focal point arrangement to supplant the R focal point, it's get a similar appearance of "FX" framework. What's more, they opened Tamagawa industrial facility delivering 8mm film cameras and focal points. The primary concern was Canola 130, the world's initial 10-key electronic adding machine they presented. In 1965:- This year they enter the photograph duplicating machine field with the presentation of the Canofax 1000. What's more, they built up Canon U.S A. Inc. In 1967:- This year was the 30th commemoration of the ordinance motto. What's more, they set up Canon Latin America, Inc. In 1968:- This year they set up ordinance business machine deals Inc. in Japan. They presented their NP framework the first electro-photography innovation. And furthermore they acquainted the plain paper copier with market. In 1969:- This year they changed their organization name to Canon Inc. Besides they built up their Fukushima camera producing plant. In 1970:- This year Canon presented their NP-1100 Japan's first plain paper copier to the market. F:NSBMAssignmentsCanon ResearchImaages With Referancespht_canon_15.jpg F:NSBMAssignmentsCanon ResearchImaages With Referancesppc-1.jpgIn multi year they presented their first cover aligner PPC-1. In 1971-1980 Canon Company began their four associations promoting their group image and their creation hardware's in New York, Philadelphia, Chicago and Los Angeles. In 1980-1999 Canon organization make new models for Color, Black and White and fax innovation. End of the 1990s every one of the four deals organizations obtained by CANON U.S.A. In 2000-2010 this day and age Canon U.S.A their four primary organizations changed their showcasing traps. In 2003 New York and Philadelphia sub organizations converged with ordinance business arrangements, Inc. In 2008 three districts authoritatively joined with the Canon Business Solutions, Inc. This consolidated quality give the best exertion to go better position Canon. Standard Business Solutions opened in excess of 50 workplaces around the U.S nation. Since they needed to give the best administration for their significant clients. In present: – Canon U.S.A Company converged with North America Canon Business Solution to from one of the biggest imaging business to business deals association on the planet. This consolidated organization named as Canon Solutions America, Inc. History of Logo The logo "ordinance" holds such implications. It viably demonstrates Canon's corporate soul, this plans to set a worldwide standard for trend setting innovations and administration while turning into a best in the business to which will guide one's expectations or aspirations towards accomplishing something. The Canon's logo, presented in 1935. Despite the fact that it changed allover to display logo as organization develops. Without being influenced these changes, the solid character without engrossing it in the broad internal stroke of the "C" has stayed flawless from the day that the organization was established. Attempt incredible endeavors to accomplish for steady conduct in correspondence since the very first moment has enormously added to the around the world. The present ordinance logo contains a striking red shading, in spite of the fact that it has experienced for various changes previously it achieving the present logo. In 1933, when exactness optical instruments research facility was built up, they utilize the name "Kwanon" to cameras produced on the trails premise right now. This title mirrored the nature of being benevolent of Kwanon, the Buddhist Goddess of Mercy, and incorporate the organization's vision of making heavenly and wonderful cameras on the planet. The logo likewise speak to the picture of the Goddess "kwanon with 1000 arms and blazes". At the point when the organization endeavor to discover to start full-scale promoting, it required a fabulous brand name that every one of the general population will acknowledge on the planet. Along these lines, for this a state of mind to a specific issue, in 1935 the name Canon was enlisted as the official trademark. This word Canon has a number implications, for example, sacred texts, basis and standard. The trademark in this way demonstrating the characteristics that merit the predetermined activity of an organization required with actuality of being definite and precise hardware, where exactness is on a very basic level imperative. It is additionally be an outflow of the organization's craving to meet world-class main and industry benchmarks. In spite of the fact that these the two words Canon and Kwanon had similar elocutions, the change went easily. An architect having some expertise in publicizing made the first Canon logo in 1935. The "C" was selective in that its best end bended internal, finishing in a sharp point. This style of specific plan of sort did not then exist in Europe or North America. The Canon name and logo were intended to demonstrate the organization's worldwide prospect, which it embraced appropriate from starting to the present. In 1947, Precision Optical Instruments Laboratory experienced many name changes before the selection of Canon camera Co, Inc. This change was imperative in that Canon brand and friends names were bound together without precedent for its history. A few adaptations of logo were additionally utilized, until the point when a brought together form was made in 1953. After further elucidation, the logo of present was culminated in 1955, it has stayed unaltered for about 50 years. Organization Officers Chief Fujio Mitarai President Masaya Maeda Official Vice PresidentToshizo Tanaka Senior Managing Director Shigeyuki Matsumoto Review and SupervisorsMakoto Araki Kazuto Ono Official Vice Presidents Yoroku Adachi Toshio Homma Senior Managing Executive OfficersHideki Ozawa Seymour Liebman Rokus van Iperen Overseeing Executive OfficersYasuhiro Tani Kenichi Nagasawa Naoji Otsuka Hiroyuki Suematsu Shigeyuki Uzawa Masanori Yamada Aitake Wakiya Akiyoshi Kimura Eiji Osanai Masaaki Nakamura Akio Noguchi Ryuichi Ebinuma Yuichi Ishizuka Kazuto Ogawa Official Officers Shunsuke Inoue Takayuki Miyamoto Katusumi Lijima Soichi Hiramatsu Kazuhiko Noguchi Masato Okada Yoichi Iwabuchi Hiroaki Takeishi Takashi Takeya Nobuyuki Tainaka Takanobu Nakamasu Toshihiko Kusumoto Akiko Tanaka Go Tokura Ritsuo Mashiko Hissahiro Minokawa Noriko Gunji Standard Organization Chart Organization B>GET ANSWER