BAC 307/05 Auditing and Assurance Services in Malaysia 2013 Tutor-marked Assignment 1

Question 1 Differentiate between the roles of the external auditors, tax auditors, and the internal auditors. (8 marks) (Supplementary 2012) Question 2 A firm of Chartered Accountant may offer various services to their client. Describe the services offered by such firms. (8 marks) Question 3 Differentiate between operational audit and compliance audit. (8 marks) Question 4 Identify and describe the difference types of auditors in the finance function. (8 marks) Question 5

Materiality arises when a misstatement in the financial statements could affect a decision of a reasonable user of the statements. Explain the levels of materiality used for determining the type of opinion, (8 marks) (Supplementary 2011) Question 6 Thirumaran and Ranjini are auditors of Mauduit Holdings Berhad. The financial director has resigned recently and the company have so far unable to find a suitable replacement. They have asked Thirumaran and Ranjini to be responsible for the preparation of the financial statements for the year ended 31 December 2011 as part of the audit. Mauduit have asked the firm to: Help them implement the SAP ERP system Assist in headhunting for a new financial director Discuss at a board meeting the amount of dividend to be paid. Hidup Beretika Berhad is planning to takeover Mauduit Holdings Berhad. Mauduit is asking the firm to act for them in rebutting statements by the takeover bidder.

Required Describe the ethical implications for Thirumaran and Ranjini in terms of (a) The Preparation of accounts (6 marks) (b) Help in implementing the SAP ERP system (6 marks) (c) Assisting in headhunting for a new financial director (6 marks) (d) Discuss at a board meeting the dividend to be paid (6 marks) (e) Takeover bid (6 marks)

Question 7 Your firm Pit Maverick has just completed the audit of Perotiga Motors Berhad for the year ended 31 December 2011. Your senior has asked one of the audit juniors to draft the audit report. The report is as follows: Report of the auditors to Perotiga Berhad Basis of opinion We conducted our audit in accordance with Auditing Standards. An audit included examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of all the estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the companys circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain as much information and explanation as possible given the time available for the audit. We confirm that the financial statements are away from material misstatements, whether caused by fraud or other irregularity or error. The directors however are wholly responsible for the accuracy of the financial statements and no liability for errors can be accepted by the auditor. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the companys annual report. Required Identify and explain the errors in the above extract. You may present your answers in the following manner. Errors or omissions Incorrect reference to standards Correction Should set out which standards are being used i.e. ISAs (30 marks) (supplementary 2012)