Audit ACC3600 Role Play storyboard
Storyboard Text
- No worries, mate!!!I will do my best to reduce the possible audit risk.
- Exactly!! we need to do more on verifying the existence of sales and its cut-off
- We don't have any CCTV
- Owner: One of my staff is stealing the food and other kitchen supplies :(
- All businesses are suffering now. We have to keep the risk of giving an inappropriate opinion to an acceptably low level
- ZOOM
- (Senior director 2 )will be in charge of the assessment of material misstatement.
- Inherent Risk
- ZOOM
- ZOOM
- The client told the audit team that she suspects one of her staff is stealing restaurant's inventory
- Control Risk
- ZOOM
- ZOOM
- The audit team is accessing the risk of material misstatement of the business to tailor the client's audit work.
- I agree!
- Senior auditor 2 is identifying the inherent risk for inventory, includes:- risk that inventory will be unsold due to competition from discounter- Risk that the order will not be received on time (limited flight during COVID)
- Management Letter 1.1 Separation od dutiesObservation:The management's attitudes towards internal control is weak. XXXXXXXX XXXXXXXXX XXX XXXXX XXXX XXXX XXXManagement response:Management should monitor the task process of the staff XXXXXXX XXXXXX XXXXX XXX.
- (She) adds that the weaknesses in the internal control system will increase the control risk of the entity- Poor separation of duties- No control system in place to monitor the staff - The owner may be tempted to override the system
- Seems like there will be an overstatement on sales due to the pressure of dropping sales.
- Due to the high risk of material misstatement, the team set a lower detection risk and plan to spend more time testing the details of transactions and account balance
- Detection Risk is HIGH!
- After understanding the client's control environment, the audit team is explaining the deficiencies in internal control by sending management letter, with the appropriate recommendations with respect to separation of duties
- Audit team is identifying the key accounts and assertions at risk due to the economic downturn in COVID period. Hence, gathering persuasive evidence
- After reviewing the message sent by the client, the team suggest that the existence assertion for inventory and various supplies account will be at risk
- The Inventory account as well.Her unethical staff is stealing company's asset
- We should do thetest counts and observe their stocktake
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