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AUDIT ASSURANCE & COMPLIANCE Table of contents Question 1: Necesary Issue Audit-related decision towards the useful life of the assets

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Added on  2019-09-26

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AUDIT ASSURANCE & COMPLIANCE Table of contents Question 1: 3 Question 2: 4 Reference list 9 Question 1: Necessary Issue Details Audit-related decision towards this issue The useful life of the assets- It is very necessary to determine the useful life of the asset for the accounting cycle which considers the use of various assets (Woodroof & Searcy, 2001, p.169). In order to avoid this issue, the senior manager should approach the others, Stewart & Kathy, to get proper

AUDIT ASSURANCE & COMPLIANCE Table of contents Question 1: Necesary Issue Audit-related decision towards the useful life of the assets

   Added on 2019-09-26

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AUDIT ASSURANCE & COMPLIANCE1
AUDIT ASSURANCE & COMPLIANCE Table of contents Question 1: Necesary Issue Audit-related decision towards the useful life of the assets_1
Table of contentsQuestion 1:.................................................................................................................................3Question 2:.................................................................................................................................4Reference list..............................................................................................................................92
AUDIT ASSURANCE & COMPLIANCE Table of contents Question 1: Necesary Issue Audit-related decision towards the useful life of the assets_2
Question 1:Necessary IssueAudit-related decision towards this issueThe useful life of the assets- It is verynecessary to determine the useful life of theasset for the accounting cycle whichconsiders the use of various assets(Woodroof & Searcy, 2001, p.169). In caseof the Double ink printer’s ltd, it is found thatthe useful life of the asset is not known. Asper as the audit & accounting principles theestimation of fixed assets should be auditedbut it cannot be done in this case.The useful life of the asset is an audit relatedissue. In this case, the company DIPL has notconsidered the useful life of the asset. Thereare no proper calculations regarding theuseful life of the asset which would lead tothe rise of an error in the audit. In order toavoid this issue, the senior manager shouldapproach the others, Stewart & Kathy, to getproper information regarding the useful lifeof the assets. The audit manager shouldprovide a draft plan of the audit regardingthis estimation because the accurate figurescannot be estimated (Whittington & Pan,2010).Allowance on stocks- The stock is anotherissue. From the financial report of thecompany, it is clear that the depreciation ofstock is necessary to find out the actual valueof the stock. In the statement of position,there is no obsolescing for stock (Accorsi,Sato MSc & Kai MSc, 2008, p.375).Such audit related issue requires an auditmanager. The audit manager should planabout the stock by way of computer systems.The manager should take a decision ofchecking the inventory status from the salesdepartment & then conduct the audit.Loans & interests- Debt management isvery important for the company as debts canaffect the capital. From the financialstatements, the interests on loans areincreasing in the income statement butdecreasing in the statement of financialposition (Sheldon et al. 2016). Such is anissue because it can lead to misappropriationsin audit regarding the estimation of the loanto capital ratio.In order to avoid this issue which can lead toerrors in financial statements, The auditmanager should ask other executives of theDIPL company to give proper informationregarding the loans. The auditor should thensegregate the number of loans given by theowners & the public. The interests should becalculated separately. Each & every interestshould have a note in the statements.a.Credit limits- Bad debts form a partof the loss. An auditor has to considerThe senior manager along with the othersnamed Stewart & Kathy. The company sells3
AUDIT ASSURANCE & COMPLIANCE Table of contents Question 1: Necesary Issue Audit-related decision towards the useful life of the assets_3
bad debts. Print on demand isnecessary to find out the cost ofbooks per order because sales areincreasing & cost of sales isdecreasing. The bad debts & sales areincreasing so it is essential todetermine the amounts actuallyreceived from the electronic sale.Value of debtors & bad debts isincreasing so the credit limits of thebuyers are important. Such misappropriation can lead to errorswhich would raise an issue.certain units on credit but the credit limits ofthe buyers are restricted. Still, it is seen thatthe number of bad debts is increasing. Theaudit manager should ask for a draft from thebill receivable clerk Gay Chan. The draftshould contain the number of bad debts fromeach & every customer. Then the auditorshould conduct the audit of the various salereceipts separately (Whittington & Pany,2010). Electronic sale- the Electronic sale is a partof the sale of the books of the company.From the financial statement of the company,it is found that the customers can orderonline. This is an issue because there aresufficient amount of bad debts but still, thedebtor's values are increasing.In such a situation the audit manager alongwith the others Stewart & Kathy should askfor the numbers of orders online & offlinefrom the accounts manager. They should firstanalyse the values & prepare a draft of thedebtors & then they should conduct the audit(Whittington & Pany, 2010).Question 2:a.b.c.Factors DetailsMateriality4
AUDIT ASSURANCE & COMPLIANCE Table of contents Question 1: Necesary Issue Audit-related decision towards the useful life of the assets_4

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