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Assessment Instrument Cover Sheet: Tick Course Learning Outcomes (CLO) Marks
Assessment Instrument Cover Sheet: Tick Course Learning Outcomes (CLO) Marks
Answer:
Following the audit work done for purchases, dispositions, and depreciation of
property, plant, and equipment throughout the sales and collection cycle, the
following audit work is undertaken for depreciation:
In addition, the auditor must examine the acquisitions that were done throughout
the period with appropriate permission from the top management as well as from
the purchasing manager.
• Determine if the depreciation rates have been calculated in accordance with the
legislation or whether they have depreciated on a fair basis, if applicable.
Make that the company has reported appropriate scrap revenue from the sale of the
old equipment in its financial records.
• When such sales are made during the middle of the year, double-check that the
appropriate depreciation has been applied to the records.
• Determine whether or not they have a habit of getting bids from suppliers, and if
so, determine whether or not they have selected the supplier that stated a lower
price, and if not, inquire as to why.
• Determine if the disposed-of equipment has been put to use for a fair amount of
hours.
Question 2 (7 Marks)
Case 1 Describe the key internal control procedures for the payroll and personnel
cycle for assessing control risk.
Answer:
Payroll internal controls are the procedures that companies must follow in order to
safeguard the confidentiality of employee payroll information. These are the
precautions taken to ensure that workers do not have access to sensitive
information. This may also help to keep workers from stealing funds. The
following are the most important internal control processes for the payroll and
personnel cycle that must be followed in order to evaluate control risk:
Access to payroll records should be restricted to just the individuals who need to
have access to them, such as the individuals who operate the payroll systems. If
you are a company owner, it is almost always the case that you will be in charge of
your own payroll. If it is not an option, employing a trustworthy manager may be
an option.
Payroll records being examined
The payroll records of the company should be checked and balanced on a regular
basis to ensure that everything is operating correctly. Performing this activity on a
monthly basis will help to remove the issues that are often observed.
One of the methods for evaluating control risk is the establishment of a separate
bank account that is linked to the payroll. When payroll or payroll taxes are
processed, the money from this account is credited to the account.
This will help to guarantee that the timecard is accurate since both you and the
representative will have to approve it. According to the representative's
recommendation, they double-checked the attendance card before presenting it to
you for review. By giving your permission, you may guarantee that workers do not
have complete control over their working hours.
Question 3 (5 Marks)
Case 1 Describe the audit work performed over a General Bank Account bank
reconciliation.
Answer:
Obtain the bank reconciliation from the customer and then do the following steps if
necessary:
The following is an outline of the audit work done on a General Bank Account
bank reconciliation:
Comparison of bank balances according to Bank statement and Cash book on the
day of closure is required. If the results are the same, there is no need to produce a
Bank Account Reconciliation Statement. When there is a discrepancy between the
two, a Bank Account Reconciliation Statement is produced.
• Compare the activities on a scale based with the transactions on the bank
statement.
• Investigate why some transactions have not yet been completed and are now
stuck in the system. As a result, it must be moved to a stale cheque account to be
used.
Question 4 (3 Marks)
Case 1 Describe the audit work performed over Prepaid Insurance expenses in the
acquisition and payment cycle.
Answer:
The following is an outline of the audit work done on Prepaid Insurance costs
throughout the purchase and payment cycle:
This is the stage at which the policies are verified with the insurance brokers
involved. Furthermore, the source papers that are used to support it are scrutinized.
This is the stage at which the policy recipient is verified with the insurance broker.
It is at this point that the part of the policy and the insurance costs that have
expired are calculated. Furthermore, the categorization is carried out in order to
evaluate the appropriateness of the allocation of manufacturing overhead and
marketing, general, and administrative costs between the two groups.