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ACTIVITY 2 - page 1

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ACTIVITY 2 page 2

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ACTIVITY 2 page 3

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Question 5

a.       False

b.      False

c.       False

d.      False

e.      True

f.        True

g.       True

Question 1

i)                    Generally speaking, auditing involves inspecting, examining, tracing and reviewing financial statements. It is a process that requires systematic planning to independently obtain evidence and evaluate them. This is done to also assess whether or not the financial statement has been prepared according to the standards.

ii)                   Accountancy involves the process of preparing the financial statement according to the standards. Audit on the other hand is the process of reviewing the financial statement s and ensuring that it has been prepared in compliance with the standards.

iii)                 True or false

a.       False

b.      True

c.       True

d.      False

e.      True

f.        True

g.       False

Case Study Cloud 9

a)      Financial report audit is mainly focused on auditing the accounting records that has been kept of McLellan’s Shoe. On the other hand, environmental audit is to measure the extent to which the McLellan’S Shoes try to minimise harm to the environment. Lastly, an efficiency is audit is conducted to assess how well resources are being allocated in the organization and may also find areas where the business can be improved further in terms of efficiency.

b)      Both reasonable and limited assurances are types of engagements. Reasonable assurance provides a higher level of assurance as compared to limited assurance. This is because in reasonable assurance, auditors are required to understand the organization well and conduct substantive analytical procedure.

c)       Auditing involves the process of gathering sufficient appropriate evidence to support the information in the financial report whilst reviewing does not involve that process.

d)      Ron should consider the following factors:

·         Firm hires certified auditors

·         Experienced in the business to be audited

·         Level of assistance

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Question 5
a) False
b) False
c) False
d) False
e) True
f) True
g) False

Question 1

i) Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria.Auditing should be done by a competent, independent person.

ii) Accountancy is the process of keeping the records of the transaction of the organization and prepare the financial statement at the end of the financial year.

Auditing is the process of checking and inspecting the financial statement and the book of accounts of the organization.

iii)
a) False
b) TRue
c) True
d) False
e)False
f)True
g)True

Case Study-Cloud 9

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5.
a) False
b) False
c) False
d) False
e) True
f) True
g) True

1.
i) Auditing is defined as the justification of information and figures done by someone other than the person who prepares it. The person should suggest the audited company to do some changes and improvement if errors and fraud are found.

ii) Accountancy is the preparation of financial statements and figures based on what has been required by the standards

Auditing is the process of examining or re-checking of the financial statements and figures prepared by the accountant with the objective of whether the financial statements is presented fairly, in all material respects or not.

iii) a) False
b) False
c) True
d) True
e) True
f) False
g) False

Case study
a) Financial report audit is the preparation of the financial report according to the financial reporting framework and whether it has been presented fairly, in all material respects in accordance with the framework

Environmental audit is a tool that acts to measure the environmental effects of certain activities on the environment against set criteria or standards (laws - environment)

Efficiency audit is where a number of aspects like financial, performance and productivity efficiency of an entity is being assessed

b)

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Activity 2

Page 1 - Question 5
a) False
b) False
c) False
d) False
e) False
f) True
g) False

Page 2 - Question 1

i) Auditing is the process of examining an organization financial records to determine if they are accurate and in accordance with any applicable rules, regulations and laws.

ii) Accountancy involves the process that creates financial statements & other financial information for decision making purposes by both internal users & external users, while auditing on the other hand is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following documented system of recording transactions.  Auditing is done to ascertain the accuracy of financial statements provided by the organisation.

iii) True or False
a) False
b) False
c) True
d) False
e) False
f) True
g) True

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QUESTION 5
a) FALSE
b) FALSE
c) FALSE
d) FALSE
e) TRUE
f) TRUE
g) TRUE

QUESTION 1

i)  Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested buyers

ii)  Accountancy is to make sure the entity’s economics events are properly recorded on at timely basis and at a reasonable cost.

Auditing is to determine the financial report reflects the economic events that occurred during the accounting periods.

iii)
a) FALSE
b) TRUE
c) TRUE
d) FALSE
e) TRUE
f) TRUE
g) TRUE

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Activity 2- Page 1
a) False
b) False
c) False
d) False
e) True
f) True
g) True

Activity 2- Page 2
1. Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicatin the results to interested users.

2. Accounting is process that creates financial statements and other financial informatio for decision making purposes by users.

3. a) False
b) False
c) True
d) False
e) True
f) True
g) False

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Q5
a. false
b. false
c. false
d. false
e. true
f. true
g. true

Q2
i. Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria.

ii. Accounting is the recording, classifying and summarizing of economic events in a logical manner for the purpose of providing financial information for decision making. While, auditing focus on determining whether recorded information properly reflects the economic events that occured during the accounting period.

iii.
a. false
b. false
c. false
d. false
e. true
f. true
g. false

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Q5
a. False
b. False
c. False
d. False
e. False
f. True
g. True

Q1
i) Auditing is sets of procedures that involves detailed examination and evaluation of a company or an organisation's financial statements to ensure the records are fair and accurate to be presented to users of financial statements.

ii) Accounting consists continuous processes and focuses on accuracy in recording and preparing all financial transactions and statements while auditing is independent; and focuses on critical evaluation of financial statements and providing an unbiased opinion on their accuracy.

iii)
a. False
b. False
c. False
d. False
e. True
f. True
g. False

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Question 5
a. False
b. False
c. False
d. False
e. True
f. True
g. True

Question 1
i. Auditing is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following documented system of recording transactions. It is done to ascertain the accuracy of financial statements provided by the organisation.

ii.  Several differences exist between an accounting and an audit. One important difference is that the audit checks the accounting process to determine its validity. Next, accounting is a daily process, whereas an audit is usually conducted annually or quarterly. Another difference is that the accounting is compiled by the employees of the company, while an audit is done by an independent body with no financial ties to the company.

a) false
b) false
c) true
d) false
e) true
f) true
g) false

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Activity 2 Page 1:

a) FALSE
b) FALSE
c) FALSE
d) FALSE
e) TRUE
f) TRUE
g) TRUE

Activity 2 Page 2:

i. Auditing is a systematic process which the objective is to give true and fair view of the Financial Statement by obtaining and evaluating evidence regarding the Company's economic events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to the interested parties.

ii. Accountancy is to record all the transactions and focuses on  preparing all financial transactions and statements. Auditing is independent and focuses on critical evaluation of financial statements and providing an unbiased opinion on their accuracy.

iii.
a) FALSE
b) FALSE
c) TRUE
d) FALSE
e) TRUE
f) TRUE
g) FALSE