Auditing
You are one of the Audit Partners of XYZ Certified Chartered Accountants Firm. You have seen a new prospective client, Performance Auto Parts Corporation. Performance Auto Parts has three locations specializing in the sale of motor vehicle auto parts as well as repair to motor vehicles. The business is owned by a widow, Mrs. Armstrong, who inherited the business upon the passing of her husband. Mrs. Armstrong has no relevant business operation skills or knowledge of the industry in which the business operates. She currently is dependent on her team of accounting clerks, led by a Financial Controller to be ethical. The Financial Controller has ultimate authority and makes decisions in all areas of the operations. Mrs. Armstrong does not require a report on the business performance. She is required to sign on all cheques but does not question the expense as long as the Financial Controller authorizes it. The accounting staff consist of six young persons with no prior accounting experience or qualification. Two accounting clerks are located at each of the business locations. They have been trained solely by the Financial Controller. The Financial Controller is paid a bonus, which is a percentage of the net profit. He was overheard by a client expressing his frustration that he has not been able to meet his monthly expenses even though he plays such a key role in the organization. You have successfully managed to schedule a meeting with Mrs. Armstrong.
prepare a power point presentation to be presented at the meeting in an effort to convince Mrs. Armstrong that she needs an external audit. An introduction to your firm and how your certified accountants have satisfied ACCA’s requirements of being chartered. ii. The importance of an external audit along with an explanation of two advantages and two disadvantages to Mrs. Armstrong and or company. iii. The responsibilities of both management at Performance Auto Parts and your firm regarding the performance of an external audit iv.Explain to her what fraud is and how it differs from an error. v.Explain the elements of fraud and why her business is at risk. vi. Explain how a Forensic Audit is done.