The ________ section of the audit report is often technical in nature and focuses on solutions to problems that surfaced. Multiple Choice recommendations classification analysis
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Akash M.
Question 1: Rhapsody Co supplies a wide range of garden and agricultural products to trade and domestic customers. The company has 11 divisions, with each division specializing in the sale of specific products, for example, seeds, garden furniture, agriculture fertilizers. The company has an internal audit department which provides audit reports to the audit committee on each division on a rotational basis. Products in the seed division are offered for sale to domestic customers via an internet site. Customers review the product list on the internet and place orders for packets of seeds using specific product codes, along with their credit card details, onto Rhapsody Co's secure server. Order quantities are normally between one and three packets for each type of seed. Order details are transferred manually onto the company's internal inventory control and sales system, and a two part packing list is printed in the seed warehouse. Each order and packing list is given a random alphabetical code based on the name of the employee inputting the order, the date, and the products being ordered. In the seed warehouse, the packages of seeds for each order are taken from specific bins and dispatched to the customer with one copy of the packing list. The second copy of the packing list is sent to the accounts department where the inventory and sales computer is updated to show that the order has been dispatched. The customer's credit card is then charged by the inventory control and sales computer. Bad debts in Rhapsody are currently 3% of total sales. Finally, the computer system checks that for each charge made to a customer's credit card account, the order details are on file to prove that the charge was made correctly. The order file is marked as completed confirming that the order has been dispatched and payment obtained. REQUIRED:- In respect of sales in the seeds division of Rhapsody Co, prepare a report to be sent to the audit committee of Rhapsody Co which: (i) identifies and explains FOUR (4) deficiencies in that sales system; (ii) explains the possible effect of each deficiency; and (iii) provides recommendations to alleviate each deficiencies
Adi S.
You are an auditor assigned to examine the financial statements of Tech Solutions, Inc., a mid-sized software development company. The company's revenue primarily comes from software licensing, with additional income generated from maintenance contracts and consulting services. The expense accounts include costs related to software development, salaries, marketing, and administrative expenses. During your preliminary review, you notice the following: The company has reported a 30% increase in revenue this year compared to the previous year. The cost of software development has also increased significantly, approximately 25% year-over-year. The marketing expenses have doubled, raising questions about their effectiveness in generating sales. There is a significant variance in the maintenance contract revenue recognized compared to previous periods, which has not been adequately explained in the financial statements. Assignment Questions: Audit Objectives: Based on the provided scenario, outline the specific audit objectives you would set for the revenue and expense accounts. Audit Procedures: Identify and describe appropriate substantive audit procedures you would implement to achieve the audit objectives for both revenue and expense accounts. Relationship Analysis: Analyze the relationship between the revenue and expense accounts in the context of Tech Solutions, Inc. How do the changes in revenue impact the related expense accounts, and what implications does this have for the company’s profitability? Reporting Findings: Assuming your audit procedures reveal discrepancies in revenue recognition and expenses that could materially affect the financial statements, outline how you would report these findings to management and the audit committee. What recommendations would you make to improve financial reporting and internal controls related to revenue and expense management? give me a conclusion
Gabriel E.
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