AUD339 Common Test: Auditing Assignment - April 2022, UiTM

This document presents a comprehensive solution to the AUD339 Auditing common test assignment from Universiti Teknologi MARA, April 2022. The assignment is divided into three questions, each addressing key aspects of auditing. Question 1 explores the regulatory authority governing the accountancy profession in Malaysia, the role of standards issued by the Malaysian Institute of Accountants (MIA), and the concept of reasonable assurance. Question 2 differentiates between internal and external auditors, identifies types of audits and auditors for various objectives, clarifies the meaning of 'true and fair' in financial statements, and outlines the auditor's roles. Finally, Question 3 delves into the Companies Act 2016, defining the Auditor's Statement and Approved Company Auditor, and analyzing a case study to identify violations and non-violations of the Act, including auditor resignation procedures. This assignment provides a detailed analysis of auditing principles and practices within the Malaysian context, offering valuable insights into the responsibilities and regulations governing auditors.

CONFIDENTIAL AC/APR2022/AUD339
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
UNIVERSITI TEKNOLOGI MARA
COMMON TEST
COURSE : AUDITING
COURSE CODE : AUD339
EXAMINATION : 23 APRIL 2022
TIME : 1 HOUR 30 MINUTES
INSTRUCTIONS TO CANDIDATES
1. This question paper consists of three (3) questions.
2. Answer ALL questions in English.
3. Start answer of every question on a new page. Answer booklet is provided by the Faculty
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO
This examination paper consists of 4 pages

CONFIDENTIAL 2 AC/APR2022/AUD339
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
QUESTION 1
An auditor is a person or a firm appointed by a company to execute an audit. To act
as an auditor, a person should be certified by the regulator authority of accounting
and auditing or possess certainty specific qualifications.
Required:
a. State the authority that govern the accountancy profession in Malaysia and
the purpose of the establishments.
(3 marks)
b. Lists ONE (1) standard issued by MIA and explain how the standards helps
the professional accountant in executing their duties and responsibilities.
(3 marks)
c. In performing the duties as an auditor, the auditor provides reasonable
assurance rather than guarantee on the correctness of the financial
statement.
Discuss whether you agree or disagree with the statement and support your
answer.
(4 marks)
(Total: 10 marks)
QUESTION 2
The external auditor is responsible for investigating financial statements for errors and fraud,
performing audits on operations, and reporting on findings, and providing recommendations.
An external auditor performs an audit, in accordance with specific laws or rules, of the
financial statement of a company, government entity, other legal entity or organization and is
independence of the entity being audited.
Required:
a. State any THREE (3) differences between Internal and External Auditors.
(6 marks)
b. For each of the following audit objective, indicate the type of audit and identify the
type of auditor that is likely to perform the audit engagement.
Type of Audit Type of Auditor
i To determine whether the Financial Statement of
Yasmeen Food Industries reflect the true and fair
viewport of the company’s financial performance
and financial position

CONFIDENTIAL 3 AC/APR2022/AUD339
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
ii To evaluate the effectiveness and efficiency of
storage operation of Kawan Food Sdn. Bhd.
iii To determine whether the general clerk has
followed the procedures that she should comply
with as written in the administration internal
control manual of local authority.
(6 marks)
c. Helmi, a major shareholder of Suria Pagi Berhad, does not understand why the
external auditors used the term ‘true and fair’ in their Independent Auditor’s
Statement as he believes that auditor is the one who should guarantee the
truthfulness of the financial reports.
Briefly explain the meaning of ‘true and fair’ to Helmi
(4 marks)
d. Briefly explain the auditor’s roles in auditing company’s financial statements?
(4 marks)
(Total: 20 marks)
QUESTION 3
A. The Companies Act 2016 contains various statutory provisions including those
relating to the appointment, rights and responsibilities of auditors
Required:
What is Auditor’s Statement and explain who is the Approved Company Auditor
(5 marks)
B. Haris is an accounting graduate from UiTM and just finished his study 6 months ago.
He is currently working at Ismail & Co, an audit firm, owned by his father, Dato’
Ismail. After completing his probation of 4 months, Haris is later being appointed as
the new partner of Ismail & Co.
One of the clients, Semerbak Bhd approached Ismail & Co to be its auditor for the
year 2021. Zaharah, the Senior Account Executive of Semerbak Bhd was once
working as the auditor at Ismail & Co but she resigned in 2019. Included in the audit
team member is Alisa, the senior audit manager, who is indebted to Semerbak Bhd
for an amount of RM26,000 due to their business relationship.
During the audit of Semerbak Bhd, Haris requested to attend the Board of Directors’
meeting but his request was rejected on the basis on confidentiality. Haris’s request
to access the Fixed Asset Regiters was also denied by Semerbak Bhd.
Due to number of issues and obstacles, Ismail & Co decided to resign from the being
the auditor for Semerbak Bhd by sending an e – mail and the resignation was
effective immediately. On the basis of negligence, Semerbak Bhd decided to bring
forward a legal action against Ismail & Co.

CONFIDENTIAL 4 AC/APR2022/AUD339
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
Required:
i. From the case above identify FOUR (4) violation and TWO (2) non –
violation of Companies Act 2016. Justify your answer.
(Present in the following format)
No Situation That Violated the Act Reasons
1
No Situation That Not Violated the Act Reasons
1
(12 marks)
ii. Explain to Ismail & Co on how can the auditor resign from his appointment
(3 marks)
(Total: 20 marks)
(GRAND TOTAL: 50 MARKS)
END OF QUESTION PAPER