Question 5a ii / b
Marking Guide
1 mark for each point regarding auditor responsibility and for each valid audit procedure. maximum 6 marks for each event | |
| auditors general responsibilities | |
| from statement of financial position date to audit report | |
| from audit report date to agm | |
| defective inventory | |
| audit must identify material events post reporting period | |
| need to check value of $225,000 is receivable | |
| documentation from insurers | |
| payment from third party | |
| disclosure in financial statements | |
| total inventory value end of year | |
| other inventory affected? | |
| management representation point | |
| discuss with directors | |
| may be a going concern issue | |
| other valid points | |
| release of dye | |
| ensure that material event is disclosed appropriately in financial statements | |
| documentation of event | |
| extent of disclosure in financial statements | |
| action if disagree with amount of disclosure | |
| possibility of modified audit report | |
| management representation letter | |
| contact insurance company | |
| going concern may be impaired | |
| other valid points | |
| maximum marks | 12 |
| 1 mark for each audit procedure | |
| discuss with directors | |
| audit any amendment to financial statements | |
| produce revised audit report | |
| inform members in other methods – speak at meeting | |
| resignation? note not effective | |
| maximum marks | 4 |