Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. katie employs 84 staff across the business, and ev

Katie employs 84 staff across the business, and everyone has a fixed remuneration, except for...

50.1K

Verified Solution

Question

Accounting

Katie employs 84 staff across the business, and everyone has a fixed remuneration, except for senior management, who also earn annual bonuses. The senior management team proposes and approves these annual bonuses, which align with industry standards. Katie also engages numerous specialised contractors during the construction phase. Each contractor negotiates an hourly rate for each job directly with the general manager, which sometimes contradicts the industry standards.The CEO allows the General Manager to negotiate these rates due to the limited supply of such skills in the industry.

Requirement

1. Must identify the critical area of the client's financial report where misstatement are likely to occur.

If the risk of material misstatement is;

- at the financial report level, you must explain the risk in detail and how it will affect the financial statements.

- at the account or transaction level, you must identify the exact account name or the transaction at risk and state the related assertions.

2. Considering all the material misstatements identified above, you must draft a preliminary audit strategy for this client

3. Must test at least two internal controls that are present in the case study

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students