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Help required in Auditing - CAT Paper 8 Query - Muhammad Amir - 12-24-2006 Hi, Below is my matter i am in trouble please help me regarding below matter i am waiting for you quick reply MATTER- In December 2006 attempt of my CAT exams i found a question in Paper 8(INT) (Implementing Audit Procedures) that, "Identify FOUR activities in which the internal audit department of a company, operating a supermarket chain, may be typically involved; For each activity identified above, provide a practical example." it had a weightage of 8 marks. i was confused whether it was asking to write a control activities such (Performance Review, Information Processing, Physical Controls, Segregation of Duties , and Authorisation) remember control activities are part of internal controls as per IAS 315 and others also such as Control Environment, Entity's Risk Assessment Process, Information Systems and Monitoring Of Controls. But in exam Answer to Question i wrote it's answer linked with Scope and Functions Of Internal Audit Department.The answer i gave was 1)Review economy, efficiency, and effectiveness, in the utalisation of entity's resources. 2)Investigate Frauds. 3)Review Financial and Operationg data. 4)Review Internal Controls and accounting system 5)Review Compliance with applicable laws and regulations I want to confirm whether i was write in stating that please tell me because i am feeling mental stress regarding my answer Also one more question A huge scenario was given "Paphos Co trades as a department store. It has 85 employees, some of whom are hourly paid, and a large administration and accounts department with appropriate segregation of duties, supervisory controls and authorisation levels throughout the various accounting functions. Your firm is auditing the company’s financial statements for the year ended 30 September 2006 and, together with an inexperienced audit junior, you have been assigned to the audit of wages. The company pays all employees on a weekly basis, using a computerised payroll system to process wages, prior to making payment directly into employees’ bank accounts. Wages costs are reported as $1·62 million in the financial statements of Paphos Co for the year ended 30 September 2006. You are about to commence tests of control on the wages system. However, from discussions with the audit junior, it is apparent that he does not understand the concept of obtaining evidence to verify the assertions made implicitly or explicitly by management and contained in a company’s financial statements. Similarly, he does not understand that there are several recognised methods that an auditor may adopt when selecting a sample of items to be tested from a population." Required (a) State FOUR financial statement assertions made by the directors of Paphos Co, in reporting wages costs of $1·62 million in the financial statements of the company for the year ended 30 September 2006. (6 marks) i wrote the answer as Completion- there are no unrecorded assets or liabilities, events and transactions( that is the assets, liabilities, events and transactions are not understated) . Occurrence- the events or transactions have occurred during the relevant accounting period(that is occurred in current accounting period- this relates to cut offs) Measurement - the events or transactions are recorded at correct amount in proper period Presentation and Disclosure- presentation and disclosure must be in accordance with relevant legislations and accounting standards. PLEASE TELL ME THAT WAS I CORRECT AND GAVE ANSWERS WITH RELEVANCE also for a full view of paper following link may be helpful remember it is December 2006 paper of International stream link is http//www.accaglob al.com/students/ study_exams/ qualifications/ technicianscheme /t8/exam_ papers/int? session=fffffffe ffffffff0a012139 4577574a2ac61fd6 07e098a5677f7303 0194cac7 i am waiting for quick reply please reduce my mental stress Regards Muhammad Amir - Abdur.Rehman - 12-27-2006 Well Mr. Amir, the first answer u gave is very very general... Whenever a scenario is given to u in a question, u must apply ur knowledge subject to that scenario... In my opinion u shud have written answer specific to the general store... Like the most important thing in a store is stock... and u didnt mention any internal audit procedure specific to stock... and u also didnt provide a practical example, as required in the question... Regarding second question... The most important assertions regarding salary are completion, existence and accuracy Occurance, measurement and presentation are not that important to salary... But u can mention any one of them to complete 4 assertions... But i never take other than the first three assertions for salary. As completion also shows u the occurance in proper period and accuracy shows u proper measurement. Presentation is least segnificant to salary. as the only thing separately presented in salary is the salary of executives and directors, which is not a major portion in a big company... One recommendation to u.... Never try to generalize things in the exam. Apply ur knowledge to specific scenarios given in the exam, and attempt the question as if u r really doing that thing in that scenario... anyways best of luck... - Muhammad Amir - 01-31-2007 Dear Sir I Exactly Answer specific to senario also given them four very practical examples the just means of my post is to only ask you that in general i had write or wrong and your post suggest me that i am write in my answers. And i am very Thankfull to your reply and also that you raise most important point that "you should be specific to the scenarios" Ues this is the point which i always remember in future in professional studies of ACCA now i am doing ACCA 2.1,2.2(UK), and 2.3(UK).Actually Paper 8 of a Cat is not such level paper where students are merely aware of the scenario based answering any ways i am also praying to ALLAH that may ALLAH Give Me A better results - Abdur.Rehman - 02-01-2007 U r always welcome... and my prayers are with u... - Muhammad Amir - 02-26-2007 Dear Sir by your prayers i am Alhamdullillah able to pass paper 8 auditing with 53% marks and also i got 75% marks in paper 9 taxation and your post really help me alot for my future carrer that always be specific to senario thanks alot Regards Muhammad Amir