Auditing Principle & Procedur / ACCT 401

College of Administration and Finance SciencesAssignment (2)
Deadline: Saturday 04/05/2024 @ 23:59
Course Name: Auditing Principle &
Procedur
Student’s Name:
Course Code: ACCT 401
Student’s ID Number:
Semester: 2nd
CRN:
Academic Year: 1445 H (2023-2024)
For Instructor’s Use only
Instructor’s Name: Dr. Mohammed Arshad Khan
Students’ Grade:
/15
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answers must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism.
• Submissions without this cover page will NOT be accepted.
College of Administration and Finance Sciences
Assignment Question(s):
1. Ahad Abdullah is a staff accountant and has been assigned to the audit of
Worldwide Enterprises, Inc. Subsequent to the completion of fieldwork,
Ahad was assigned to draft the audit report. The content of one of the
paragraphs he has drafted reads as follows:
As explained in Note 2 to the financial statements, Worldwide Enterprises
has charged goodwill and certain other intangible assets acquired in two
separate acquisitions directly to shareholders’ equity. Under generally
accepted accounting principles, these intangibles should have been recorded
as assets and amortized to income over future periods. Had these intangibles
been capitalized, total assets would have increased by $400,000 as of
December 31, 2011 and net income and earnings per share would be
increased by $380,000 and $2.25, respectively (assuming a 20-year
amortization period)
.
a. Based on the contents of the paragraph above, which condition requiring
a departure from a standard unqualified/unmodified opinion exists in the
engagement?
b. Assuming that the engagement partner agrees with the paragraph Ahad
has prepared above, where in the auditor’s report should the paragraph be
placed?
c. How would the materiality of the condition above affect the final choice of
opinion?
(4 Marks)
College of Administration and Finance Sciences
Answer
College of Administration and Finance Sciences
2 You are auditing cash for Moonbeam, Inc. In meeting with the CFO
during the planning stages of the audit, she indicated that there was a
high risk of misstatement due to fraud in the cash account, given the lack
of proper segregation of duties. As the auditor, what tests could you
perform to detect fraudulent activities in the cash account?
(4 Marks)
Answer
College of Administration and Finance Sciences
3. Identify the types of transactions that occur in the property
management process.
ANSWER:
(3 Marks)
College of Administration and Finance Sciences
4 State the six functions that make up the inventory management
process. For each function, identify the related documents and/or
records that would be used by a manufacturing company.
(4Marks)