Chan & Chow offer their clients a range of professional services, including:
a. providing advice on accounting policies and accounting standards
b. auditing annual financial reports
c. providing assistance to management and the board in strengthening internal controls and corporate
governance practices
d. providing assistance with the establishment and training of internal audit teams
e. checking compliance with company policies and legislative regulations
Required: For each of the five (5) services (a. – e.) listed above, determine whether it is an assurance
engagement or not and explain your answer.
Week 2 Question (10 marks)
Shelly, Kelly & Mark (SKM) are the auditors of Bass. SKM’s IT consulting division has undertaken a
number of accounts receivable management system implementation projects and is actively looking
for opportunities to perform more of this type of work. As a result, SKM’s IT consulting division is
planning to submit a proposal to implement an accounts receivables management system at Mass.
(a) Identify and explain the two primary threats to independence for SKM. (5 marks)
(b) Outline an appropriate safeguard to address each of the threats identified above. (5 marks)
Your firm has been approached by Queensland Fun In The Sun Pty Ltd (Qld FITS), a family owned resort company based on the Great Barrier Reef. Qld FITS offers holiday and leisure activities. As well as a five-star resort, they also offer backpackers’ accommodation and a family hotel. Its operations also include boating, surfing and diving activities. Robert and Eunice Leatherwood own the majority of the shares in the Leatherwood Group which controls Qld FITS. Eunice is the CFO of Qld FITS as well as director of both companies and Robert is the chairman of the board of directors of both Qld FITS and the Leatherwood Group
April 28, 2015
9:05 pm
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