QUESTIONS
PART A
Since 4X Heavy Ltd is a new client of KCA outline the steps that you would initially undertake as part of taking on this client.
PART B
Based on the facts specific to 4X Heavy Ltd:
(a) Identify the audit inherent risk and rate the risk as low, medium or high.
(b) Identify the audits control risk
(c) Evaluate control and inherent risk
(d) Determine overall audit strategy
PART C
a) Identify 2 key account balances that are at highest risk of misstatement
b) Explain why these are the highest risk
c) Design 4 substantive audit tests to carry out the work performed on each of the identified 2 key account balances.
d) For each of the 4 substantive audit test designed identify the key assertion it addresses.
PART D
(a) Based on the above make 4 recommendations to management on completion of audit.