AUD 610

QUESTION 24 (JUNE 12, Q3B)

QUESTION 26 (DEC 13, Q4A)
MUHAMMAD IRSYADUDDIN BIN SUMAIL
MOHAMAD NUR RAFIQ BIN RAHIM
AYU FARIDAH BINTI NOR AZMAN
FATIMAH ZAHRA BINTI MOHD ZAN
IFFAH HAZIRAH BINTI MOKHTAR
NURUL SYAFIKA BINTI MOHD GHANI
NOR HIDAYU BINTI ISMAIL

QUESTION 24 (JUNE 12, Q3B) PAGE 52
I) DESCRIBE THE AUDIT RISK ARISING FROM THE ABOVE SCENARIO.
The company may difficult to manage since they just opened 2 new branch in JB
and Penang
En Halim was appointed as new chief executive in December 2012. This position
may risk to company since he not very familiar with company and the decision
made by En. Halim may not align with the companys goal.
The 3 years period of purchasing exclusive right to distribute of Sany Phone was
too long. The android technology easy out-to-date as the technology speedily
advance.
Extreme phone Bhd has exclusive rights to distribute another android phone. This
issue will give effect on the Fantastics sales.

II) BRIEFLY DISCUSS FOUR AUDIT PROCEDURES THAT YOU
NEED TO PERFORM IN THE AUDIT OF FANTASTIC PHONE BHD.
Observation and enquiries of information from management and third party
The auditor need to observe the companys policy and procedures. The auditor
need to observe and ask questions the related employee regarding the internal
control of the company such as the purchases cycle, the sales cycle and others.
Auditor also can require information from third party such as supplier and bank to
ensure the completeness of data.

Inspection of record and asset
Inspection of documents, records and physical asset such as the auditor need to
inspect whether the two branches are exist or not by doing site visit. Besides, the
auditor will check a sample of items from the inventory sheets to the physical
inspection of inventory to ensure that the inventory recorded on the sheets actually
exists


Analytical procedures
1) As risk assessment procedure. The auditor must understand the Fantastic
Phone Bhd. and its environment to assist in planning the nature, timing and
extent of other auditing procedures (lead schedule)
2) As substantive procedures. To obtain audit evidence about particular assertions
related to account balances or classes of transactions by doing test of details
and making selection to make vouch and compare one year to the previous one
in the working paper
3) As an overall review of the financial information in the final review stage of the
audit

Recalculation and re-performance. Consists of mathematical accuracy of
documents or records. While re-performance involve the independence execution
of procedures or controls that were originally performed by companys personnel.


III) DIFFERENTIATE BETWEEN MONETARY UNITS SAMPLING AND
ATTRIBUTE SAMPLING AND PROVIDE AN EXAMPLE FOR EACH
MONETARY UNITS SAMPLING ATTRIBUTE SAMPLING
Use attribute sampling theory and
technique to estimate the monetary
amount after misstatements for a class of
transaction or an account balance.

Valuation of monetary unit sampling are
known as probability-proportional-to-size
sampling and cumulative monetary among
sampling

For example, auditor usually use monetary
unit sampling to sample and test account
receivables, loan receivables, and
inventory
Estimates the proportion of a population
that possesses specified characteristics

The most common use of attribute
sampling is for test of control.

For example, the auditor may want to
gather evidence that a credit check is
perform of customer orders before
distribution

QUESTION 26 (DEC 13, Q4A) PAGE 53
FOUR TYPES OF CONTROL ACTIVITIES & EXAMPLES:
Performance Reviews:
Independently check the performance of the individuals or
processes in the accounting system. Example: comparing the actual
performance with budget.

Information Processing Controls:
On how information in each transactions was generated and
processed. Example: sequence check to determine if input data are
in proper numerical or alphabetical sequence.

Physical control:
Physical security of assets. Example: periodic physical counting of
assets such as inventory in the store.

Segregation of duties:
Entity should segregate the authorization of transactions,
recording of transactions and custody of related assets. Example:
in purchasing cycle. The person in charge in ordering materials,
authorizing the payment and the storekeeper should be the
different person.


THANK YOU