SBC group has recently incorporated a subsidiary company DJ Ltd. included in property development. The management of DJ is uncertain as to the need for an audit. You, as the auditor of SBC group, have been asked to visit DJ Ltd. and describe to its management the more basic aspects of the accountability of the body.
Required:
Question 1: Describe to management what an audit is.
Question 2: In brief explain the given types of audit:
a) Statutory audit
b) Management audit
c) Value for money audit
Question 3: Describe how management audit distinct from the financial audit.
Question 4: For auditors to give a reasonable assurance that the financial statements are free from material misstatements, legislation establishes rights and duties.
a) In brief describe three statutory rights and three duties of the auditors.
b) State five advantages and five drawbacks of statutory audit.