Question 1

Question 1 (a)
i. Background of the company
CIMB Group Holdings Berhad is a Malaysian universal bank headquartered in Kuala Lumpur and operating in high growth economies in ASEAN. CIMB Group is an indigenous ASEAN investment bank. CIMB has a wide retail branch network with 1,080 branches across the area.
The group operates under several bodies, which include CIMB Investment Bank, CIMB Bank, CIMB Islamic, CIMB Niaga, CIMB Securities International and CIMB Thai. The group’s business activities are mainly in the areas of Consumer Banking, Wholesale Banking, comprising Investment Banking and Corporate Banking, Treasury ; Markets, and Group Strategy ; Strategic Investments, with its core markets being Malaysia, Indonesia, Singapore, and Thailand. CIMB Islamic runs in parallel with these businesses, in line with the group’s dual banking model.
The group has over 40,000 employees located in 18 countries, covering ASEAN and major global financial centers, as well as countries in which its customers have important business and investment dealings.
The group’s geographical reach and its products and services are complemented by partnerships. Its partners include the Principal Financial Group, Bank of Tokyo-Mitsubishi UFJ, Standard Bank and Daewoo Securities, among others.

ii. Description of the logo of the company

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iii. The vision of the company
To be the leading ASEAN company.

iv. The mission of the company
To provide universal banking services as a high performing, institutionalized and integrated company located in ASEAN and key markets beyond, and to champion the acceleration of ASEAN integration and the region’s links to the rest of the world.

v. Values of the company
Our values are the beliefs that guide our actions as we pursue our vision.
• Customer-centric:
We exist to serve our customers and we sell good products and services that our customers understand and value.
• High performance:
We work hard and we work strategically for customers, staff and other stakeholders.
• Enabling People
We empower and align our people to innovate and deliver value in their workplace as well as for the community they serve.
• Strength in Diversity
We have respect for different cultures, we value different perspectives and we recognize diversity as a source of strength.
• Integrity
We are honest, respectful and professional in everything we do because integrity is the founding value of CIMB.

vi. Organizational charts of the company

vii. Media reports about the company
Kuala Lumpur: CIMB Bank Berhad and PT Bank CIMB Niaga recently won a total of six awards at The Asset Triple A Treasury, Trade, Supply Chain and Risk Management Awards 2018. The awards are annual industry excellence recognition for corporate treasury management, trade finance, supply chain and risk management.
CIMB Bank Berhad won the awards for Best in Treasury and Working Capital – SMEs (for the second consecutive year); Best Service Provider for Cash Management and Best Cash Management Solution. PT Bank CIMB Niaga Tbk, on the other hand, won the awards for Best Service Provider for E-Solutions Partner (for the second consecutive year); and two separate Best Cash Management Solution awards.
Hendra Lembong, CEO, Group Transaction Banking, CIMB Group, said, “These awards are a testament to CIMB’s transaction banking leadership and a strong commitment to delivering solutions that drive real value for our customers. As a leading ASEAN universal bank, our focus on developing cutting-edge digital propositions will also empower customers to grow their business locally. We are humbled by these awards and appreciate our customers for their continued believe in CIMB.”
The Best Cash Management Solutions awards recognized CIMB’s widespread network in Malaysia and Indonesia, with innovative delivery systems and numerous collections tools, including cashless and straight-through-processing solutions. These have enabled clients to increase efficiency, save cost and increase cash flow. CIMB’s cash management solutions contain Plug n Pay, mobile Point-of-Sale, and the Corporate Card Solutions.
The Best in Treasury and Working Capital – SMEs award recognized CIMB’s initiatives in empowering Malaysian SMEs with cash management and trade finance capabilities that significantly improve their treasury and working capital management.
David Lim, Chief Executive, CIMB Bank Berhad, Hong Kong Branch, getting the six awards on behalf of CIMB Bank Berhad and PT Bank CIMB Niaga Tbk at The Asset Triple A Treasury, Trade, Supply Chain and Risk Management Awards 2018 Ceremony held in Hong Kong recently.

b) Write an essay describing ten detailed reasons for choosing the particular company. You may include any relevant information about the company that will show the distinction of the company in comparison with other companies in Malaysia.

One of the reasons for choosing CIMB Bank is a nice place to work with the great team to make the workplace as an interesting place to work. For example, an employee works as long as 26 years under CIMB Bank with the team.

Secondly, CIMB Bank is the great place to learn new thing. The workers can learn new terms by answering a call from customers and dealing with their emotional response. We can improve our interpersonal skill and communication skills. For example, the bank worker needs to offer high-quality customer service by answering any doubt of the customers.

The most importance and attraction for workers CIMB Bank is a lot of welfare. EPF and Socso contribution by the employer are the basic welfare for the workers. The employee gets more benefits like a free vacation with free tickets and accommodation. For instance, the colleagues plan to a nice place for traveling to relax.

Next, the CIMB Bank workers have the good mood and motivation to start a working day. This is because they have morning session before starting their heavy task. For example, the workers play some fun games for 5-10 minutes to complete the game. This section is totally different from others companies such as Public Bank.

Another simple reason is nearby with the residential area. It is convenience to work on time and save the petrol cost. For instance, there have several modes to work such as bus, car, motor, LRT, and others.

In addition, CIMB Bank cares allowance of employees as much as they could. They paid high salaries amount to their employees. For example, vice president can get RM15, 000 for monthly and manager can get RM7, 000 until RM8, 000.

Moreover, the particular company very concern and take care of employee’s health. It is because they have provided a free medical care for employees and their families. For example, they can go to claim the free medical care when getting sick or any hurt.

Furthermore, the employees those who worked in CIMB Bank can enjoy additional tax savings. It is because they could achieve a specific amount then they can get the tax relief. So that, they can save the extra money to pay more tax fees.

Besides that, the staff has the opportunity and easy to get further information about the investment. The employees can get the latest information updates to make better decisions. Hence, they will satisfy more profit with CIMB Bank investment by the latest update with current issues such as read news, get a briefing from the manager and be alert on the fluctuation of the financial market.

Last but not least, the management has arranged the time hour very well. It is because their working hour is rather flexible with as long as tasks are completed on time then can leave. However, it is up to you to work as overtime or on time. So, those who have children is very convenient for them.

Question 2 (a)

1. Banker
i. Personal bankers are sometimes referred to as securities, commodities, and financial services sales agents.
– They are responsible for performing banking duties and overseeing the financial activities for personal accounts.

ii. The requirements to apply for a banker included a high school diploma or GED.
– A college degree isn’t necessary to find work, but a 2-year associate or 4-year bachelor’s degree in math, finance or business might help one get hired or promoted.

2. Management Trainee
i. They have to receive training from the concerned people in addition to performing duties in some departments such as client services, healthcare data, operations, sales of a particular organization.
– Next, learning staff functions and line, management viewpoints, company policies, practices and operations which are important in the proper functioning of an organization in the corporate world.

ii. The minimum requirements to become a Management trainee involved possesses a good honor Degree or Master Degree in the Actuarial Study with minimum CGPA of 3.5 from a well-recognized University in any discipline.
– Then it is very important with an open-minded individual who enjoys working in a fast-paced and challenging environment.

3. Relationship Manager
i. Manage and develop a portfolio of corporate banking customers with a purpose to deepen and broaden relationships with our clients.
– Achieve various individual business targets and contribute to the team performance.
– Conduct regular review and take proactive measures to ensure credit quality.
– Cross-sell a full range of banking products.

ii. Bachelor’s degree in Business Management, Banking, Finance or relevant qualification.
– Minimum of 5 years experience in relationship management, preferably in financial institutions.
– Strong communication, interpersonal and analytical skills.
– Proficiency in English, Bahasa Melayu, and Chinese.

4. Business Analyst
i. Provide analytical, marketing and research support to banking activities including data collection, analysis and project management
– Prepare financial and market analysis
– Prepare banking service analysis including deposits, interests, corporate banking and cash management
– Develop portfolio analysis pricing and profitability analysis

ii. Bachelor’s degree in business, finance, or similar fields.
– Minimum 3 years working experience as a business analyst in the banking industry
– Proficiency in Microsoft applications including Word, Excel, and Outlook
– Effective communication, computer, analytical and project management skills

5. IT Manager
i. Manage information technology and computer systems
– Plan, organize, control and evaluate IT and electronic data operations
– Ensure security of data, network access, and backup systems

ii. Bachelor’s or Master’s degree in a computer field
– Minimum 5 years working experience in IT field
– Excellent knowledge of technical management, information analysis and of computer hardware or software systems
– Hand-on experience with a computer network and network installation

6. Accountant
i. Description or job scope
– responsible for maintaining the institution’s general ledger
– responsible for conducting month-end close
– accountant responsible for a specific financial function in the large institutions
– For instance internal auditor, tax specialist, treasury accountant

ii. Minimum qualification
– must typically possess at least a bachelor’s degree in accounting or finance
– at least 3 years working experience
– good at communication skills and interpersonal skills

7. President
i. Description or job scope
– is a financial services executive who oversees banking operations, planning, policies, and practices
– generally reports to the CEO and has several direct reports responsible for a variety of lending, deposit, savings, credit, and other consumer banking products
– responsible for both internal and external communication and marketing of financial products
– representing the bank in the media, speaking at conferences on behalf of the bank, planning and monitoring budgets and other financial activity.

ii. Minimum qualification
– bachelor’s degree or master’s degree in finance
– Education is important as well but the experience will always take driver’s seat

8. Intern
i. Directly answer phone inquiries to provide basic company information and respond to network communication, social media posts, and emails
– Assist in preparing and classification of information, research materials, and manage documents
– Take notes and memos during meetings

ii. Must be 18 years of age
– Familiar with computer skills such as Microsoft Word, Microsoft PowerPoint and Microsoft Excel
– Self-reliant and able to work without supervision

9. Sales manager
i. Direct distribution of product or service and assign sales territories
– Manage a team of sales staff.
– Create prizes and other rewards for a sales representative to meet their goal.

ii. Minimum qualification
– Experience in planning and implementing sales strategies
– Excellent written and verbal communication skills
– Ability to lead a sales team

10. General manager
i. Contributes to team effort by accomplishing related results as needed.
– Maintains quality service by establishing and enforcing organization standards.
– Develops a strategic plan by studying technological and financial opportunities.

ii. Minimum qualification
– Ability to coach, train and motivate employees
– 5 years and above Qualification Review Sheet experience

Question 3
Resume (1)
Name: Agnes Tan Hooi Lee
Telephone Number: 010 3808 252
Email: [email protected]
Gender: Female
Language: Chinese, Malay, English
Address: 8-06, Pangsapuri Duta Emas, 14000 Bukit Mertajam , Pulau Pinang.
Objectives
• I would like to perform well in your company by achieving all the possible targets.
• To acquire a position in your organization and gain knowledge and improve the working experience.
Educational Background
• Degree in Accountancy at IPK College
From the Year 2016 to the Year 2018
CGPA 3.3
• Diploma in Accountancy at IPK College
From the Year 2014 to the Year 2016
CGPA 3.5
• Secondary school at SMK Permai Indah
Graduated when From 5
SPM result was 8As
Working Experience
• As a clerk in Finance Department at Ban Chuan Trading Co. Sdn Bhd for 1 year.
• As a waitress in Yang Jia Restaurant as a part-time job.
• As a promoter in Billion Shopping Centre when holidays.
Computer Knowledge
• Microsoft Excel
• Microsoft Word
• Microsoft PowerPoint

Cover letter (1)
Dear Sir / Madam:
I am Agnes Tan Hooi Lee, graduated from IPK College with the course of Diploma in Accountancy. I have got so much experience that enhanced my leadership skills along with my academic qualification. Malay, English, and Chinese are my fluent languages.
During my study life, I have learned a lot of accounting management skills. Last year, I had been worked as a practical training at Ban Chuan Trading Co. Sdn Bhd with a position clerk in Finance Department. Computer Microsoft Excel, Microsoft Word, and Microsoft PowerPoint are offering me.
If I am lucky to be selected to work in your company, I believe that I can help in term of managing the company’s Accounts as well and developing the company’s revenue in the next several years.
Having believe in that, your company is the right choice for me to make my skills and qualification useful. I really hope to get a favorable reply from your side and I will keep follow up with you in a few days to answer any preliminary questions that you may have. In the meantime, you may reach me at 010-3808 252 for any require.
Yours truly,
Agnes__
(Agnes Tan Hooi Lee)

Resume (2)
Name: Tan Sze Kee
Gender: Female
Nationality: Malaysian
Telephone Number: 0185765262
Email: [email protected]
Address: 49, Jalan Murai Jaya 2, Taman Murai Jaya, 14100 Simpang Ampat,
Pulau Pinang

Education
– Bachelor’s degree in Business Administrative at IPK College (CGPA 3.5)
– Diploma of Business Administrative at IPK College (CGPA 3.2)
Experience
– Assistance Relationship Manager in OCBC Bank (2016-2018)
– Customer Service Supervisor in OCBC Bank (2014-2016)
– Customer Service Representative in RHB Bank (2012-2014)

Key Skills
– Excellent Communication skills
– Exceptional customer service
– Good sales and negotiation skills
– Ability to analyze and research information

Career Objectives
– To achieve all possible targets and help to ensure a company’s growth.
– To gain more knowledge and ensure the vision of the company is achieved well.

Cover letter (2)
Human Resource of CIMB Bank

Dear Sir/Madam,
I am Tan Sze Kee. I graduate from IPK College with the course in Business Administrative. I am writing to express my interest in the position of Relationship Manager. I learned a lot of things about my college life such as leadership skill, communication skill, and interpersonal skill and so on.
I have six years of working experience in relationship management. I began my career as a customer service representative at RHB Bank. I had learned an of lot new thing in relationship management although I had no any experience. I learned to solve and deal with all customer’s requests and complaints to provide good customer service for them. After three years, I become a customer service supervisor. Because of my strong communication skills, I was promoted to become an Assistant Relationship Manager at OCBC Bank.
One of my biggest strengths is my communication skill. Every day, I need to face many customers and help them solve any problems. High-quality customer service was offered to them.
Besides that, I have good customer service skill. For example, I received positive customer comment letter for my good service. Otherwise, my weakness is impatient. But, I am looking to improve in this area.
As you can see from my enclosed resume, my professional qualifications, and working experience match this position’s requirements. I strongly believe that this is the right company and good chance for me to make my skills and qualification useful. If I am selected to work for your company, I can help in term of developing the company’s growth and income.
I hope to get the reply from you as soon as possible. I will follow up to get the updates. If there is any question, please do not hesitate to contact me at 0185765262. Thank you.

Yours sincerely,

___Sze___
(TAN SZE KEE)

Resume (3)
Name: Ooi Soek Li
Age: 18 years old
Address: 2, Lorong Merak 48, Taman Merak Jaya, 14100 Simpang Ampat, Pulau Pinang.
Email: [email protected]
Contact: 01123218505

Objective
Seeking a position as an accountant which can expand my experience and skills for a further career.

Education
• Diploma in Accountancy
IPK College | May 2018 – present
• SPM
SMK SIMPANG AMPAT | 2013 – 2017

Working experience
• Clerk | December 2017 – present
CT Link Management Services, Simpang Ampat.

Cover letter (3)
Dear Sir / Madam,
I am Ooi Soek Li. With great willingness, I am applying for the position as an accountant at CIMB Bank. I believe that my education, skill-set, and experience make me an ideal candidate for this position at your company.
I am taking the course of Diploma in Accountancy in IPK College. During my study life, I have gained a lot of experience in this field. While waiting for my SPM results, I worked as an accountant trainee at CT Link Management Service. I improved my Microsoft Word and Excel skills. Besides, I learned a lot of accounting knowledge.
I wish I could be a part of your company and growth myself in your company. I would be delighted to have an opportunity to personally interview with you. I really hope that I can receive a favorable reply from you. Please feel free to contact me at 011-23218505. I appreciate your time and consideration.

Thank you.

Yours truly,
Soekli__
(OOI SOEK LI)

Resume (4)
SEAH YI WEN
1645 Jalan Sekolah,
Kampungan Berapit,
14000 Bukit Mertajam,
Pulau Pinang.
Tel : 012-9876540
E-mail : [email protected]

Objective

? Individual seeking to get accountant position at your company which will good from strong mathematical, deductive reasoning, and problem-solving abilities.
? To help the company grow in the future and this also will make me gain some working experience

Education background

? Degree in accounting at IPK College
From the Year 2016 to 2018
CGPA is 3.2
? Diploma in accounting at IPK College
From the Year 2013 to 2015
CGPA is 3.3
? Secondary school at SMK Berapit
Graduated in the year of 2012
SPM result is 4As

Working Experience

? Work as a clerk at FAC Company for 2 years
? Practical training at KIT Company for 9 months
? Work as a waitress at Restaurant Tan during the school holiday

Cover Letter (4)
Dear Sir / Madam,
I am Seah Yi Wen. Regarding the job opening at job street.com, I am interested in the accountant position of your company. I graduated with a degree in accounting from IPK College.
During my study life, I have learned a lot of accounting skills such as computer skills, communication skills, and others. Besides, I also had 9 months of practical training at KIT Company and more than 2 years working experience in FAC Company.
If I selected to work at your company, I believe my skills and motivation will shine in this work. I really hope that you will make a serious consideration of whether or not to hire me based on my resume. Thank you for your time. I look forward to hearing from you.
Sincerely,
Wen
(SEAH YI WEN)

Question 1

Question 1:
a) To explain the procedures you would perform to confirm that inventory, sales and purchases cut-off is accurate.
Auditor can obtain evidence by one or more of the following procedures. The procedures which will be performing to confirm that inventory, sales and purchases cut-off is accurate are inspection, observation, inquiry, confirmation, re-calculation, re-performance and analytical procedures.

• Inspection

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? Inspection is an audit procedure in view of the examination of records or archives, regardless of whether interior or outer, that could be held in different structures, for example, paper, electronic or comparable, or on the physical evaluation of an advantage.

? The inspections of records and reports gives audit prove whose unwavering quality relies upon their temperament and source.

? Inspecting certain reports may give direct audit confirmation of the presence of an advantage, for example a money related instrument like an offer or a security where the archive itself constitutes the asset.

? At a similar time the assessment of the record may not give confirm in regard of the statements of possession and valuation of the assets.

? Similarly the investigation of substantial resources may give solid review prove about their reality yet not about the element’s rights and commitments or the valuation of the assets.

? Inspection of tangible assets such as record in the accounting record affirms presence, yet does not really affirm rights and obligations or valuation.

? Inspection of documentation or records such as this is in regards to the examination of reports or records, both inner and outside, in paper, electronic or different structures.

? This procedure gives confirmation of differing dependability relying upon the nature, source and viability of controls over generation in the event that it is interior.

Observation
? Observation is rather an audit procedure that comprises of taking a gander at a procedure or strategy being performed by others with the goal that confirmation about the genuine execution is gotten.

? However observation provides evident that is restricted to the point in time when it happens and by the way that being observed may impact how the procedure or method is performed on such event.

? Examples of observation are the auditor’s participation at the stock tallying by the element’s staff and observing the execution of control exercises.

? The auditor can acquire prove by viewing a procedure and perceiving how it is completed and affirms the techniques being happen in.

? For example, post opening.

• Inquiry
? Inquiry is a kind of type of audit procedure that is utilized broadly amid the execution of a review notwithstanding other procedures.

? It comprises of looking for both financial and non-financial information of people inside or outside the substance.

? Inquiries are essential as they may give new data to the auditor or verifying review confirms or, in actuality, data that varies altogether from other data got by the auditor. This includes looking for data from customer staff or outside sources.

? Obtain prove by making inquiry. Does not give adequate review proof to distinguish a material misstatement at attestation level.

• Confirmation
? Confirmation procedures might be a critical wellspring of significant and audit evidence.

? External confirmation is audit evidence that is gotten as a direct composed reaction to the examiner from an outsider such as the confirming party in paper frame, electronic medium or other medium.

? External confirmations are typically utilized while confirming declarations identifying with account balances, similar to payables and receivables, however ought not be confined to such things as it were.

? The auditor may solicit affirmation from the terms of understandings and exchanges with outsiders, regardless of whether any progressions to existing assentation’s has happened or whether no extra conditions are connected to an assentation, maybe in a different archive. A particular sort of enquiry where the auditor looks for affirmation from a gathering outside the element. For example, it can be from a bank or client. For example, it can be from a bank or client.

• Re-calculation
? Recalculation is a procedure that comprises of checking the numerical precision of archives or records and that can be utilized to confirm the exactness of the chronicle of exchanges or of the use of bookkeeping arrangements, for instance by recalculating depreciation of tangible assets.

? Recalculation anyway does not give confirmation of the exactness of the evaluated rate of deterioration charged in connection to each class of benefits.

? The auditor will be cheeks the arithmetical exactness of reports or records and can be performed using IT.

• Re-performance
? Re-performance rather includes the free execution by the auditor of procedures or controls that were initially executed as a major aspect of the substance’s inside control.

? The auditor re-performs a check or control initially did by the customers or who as a feature of the substance’s inside control.

• Analytical Procedures
? Analytical procedures can or ought to be utilized at different phases of a audit engagement: at the hazard evaluation arrange, as substantive review techniques to confirm budgetary explanations attestations and towards the finish of the review to prove whether the money related proclamations are predictable with the reviewer’s comprehension of the element.

? Analytical procedures include assessments of money related data through investigation of conceivable connections among both budgetary and non-monetary information. They additionally incorporate examination of vacillations and connections that are conflicting with other important data or that contrast from expected qualities by a noteworthy sum.

? At the assertion level, analytical procedures might be utilized as substantive methodology either all alone or in conjunction with trial of points of interest.

? Substantive analytical procedures are for the most part more material to expansive volumes of exchanges that have a tendency to be unsurprising after some time and for which there is a desire that the connections among information exist and will proceed without signs in actuality.

? Sometimes a straightforward model may work out as successful logical methods. For example if a substance has a steady number of workers at settled rates of pay amid a period, at that point the reviewer may appraise the aggregate finance costs for the period with an abnormal state of exactness, subsequently acquiring review prove for a
critical thing in the records and decreasing the need to perform trial of subtle elements on the finance.

? In different cases analytical procedures may give less convincing confirmation, for example when net edge rates are ascertained and contrasted all together with affirm an income sum, that may regardless be applicable if utilized with other procedures

? An example of effective combination of substantive analytical procedures and trial of points of interest could be in regard of the valuation statement for money due, where the examiner may perform analytical procedures on a matured rundown of account holders notwithstanding trial of detail on consequent money receipts to check collectability of the receivables.

? Evaluating and contrasting financial information made by an investigation of conceivable relationship among financial and non-financial data and investigation of recognized changes and connections conflicting with other data.

b) Define in detail the basis for valuing inventory in accordance with International Financial Reporting Standards.
• The objective of International Financial Reporting Standard
? To prescribe the accounting treatment for inventories. An essential issue in accounting inventories is the measure of cost to be perceived as a benefit and conveyed forward until the point when the related incomes are perceived.

? Provides direction on the assurance of cost and its consequent acknowledgment as a cost, including any record to net feasible esteem.

? It additionally gives direction on the cost equations that are utilized to appoint expenses to inventories.

? To create, in the general population intrigue, a solitary arrangement of high caliber, reasonable, enforceable and universally acknowledged monetary detailing norms in light of obviously explained standards.

? These gauges ought to require high caliber, straightforward and practically identical data in money related proclamations and other budgetary answering to encourage speculators, different members on the planet’s capital markets and different clients of financial information make economic decisions. To advance the utilization and thorough use of those measures

? In satisfying the above targets, to assess, as suitable, the necessities of a scope of sizes and kinds of substances in differing financial settings.

• In IAS2 Inventories contains the necessities on the best way to represent most sort of inventories. The standard expects inventories to be estimated the lower of the cost and the net realisable value (NRV) and outline accepted methods of determining cost, including specific identification, first-in first-out (FIFO), last-in first-out (LIFO) and weighted average cost.

• IAS 2 gives direction to deciding the cost of inventories and the ensuing acknowledgment of the cost as a cost, including any record to net feasible esteem.
It likewise gives direction on the cost recipes that are utilized to allot expenses to inventories. Inventories are estimated at the lower of cost and net feasible esteem.

• Net realisable value is the assessed offering cost in the normal course of business less the evaluated expenses of fulfillment and the assessed costs important to make the deal. The cost of inventories incorporates all expenses of procurement, expenses of transformation, for example, coordinate work and creation overhead and different expenses brought about in conveying the inventories to their present area and condition.

c) State the types of inventory which may be worth less than cost
• Slow moving inventory
• Obsolete or superseded inventory
• Second inventory and items that have been damage
• Inventory which is being or is soon likely to be, sold at reduced prices
• Discontinued inventory lines
d) Describe the investigations you will carry out to identify this inventory
• Reconcile the inventory count to the general ledger
? Because it is totally conceivable that somebody inaccurately checked the stock. Provided that this is true, have an alternate individual consider it again such since the main counter could commit a similar tallying errors a second time.

? Further, if the physical check gives off an impression of being altogether lower than the book adjust, it is very conceivable that there are more inventories in a second area – so glance around for a second reserve of stock. Relating is the in all probability purpose behind a difference, so think about this progression first.

? We need will follow the valuation ordered from the physical stock check to the organization’s general ledger, to confirm that the tallied adjust was conveyed forward into the organization’s bookkeeping records

? Compare the inventory counts in the organization’s records to the genuine sums on the distribution centres racks, make sense of why there are contrasts between the two sums, and make changes in accordance with the records to mirror this examination.

? Inventory reconciliation is a critical piece of cycle checking, since the stockroom staffs utilizes it to ceaselessly refresh the precision of its stock records. Stock record precision is expected to guarantee that substitution things are requested in an opportune way, that stock is appropriately esteemed, and that parts are accessible available to be purchased or generation when required.

? Ensure that the genuine and recorded inventory amounts are the same toward the finish of the year, so that there will be no issues when the stock is audited.

• Test check
? Occurrence, for example, to frame a feeling concerning whether exchanges and occasions that have been recorded have happened and relate to the element.

? Completeness, for example, to frame a feeling concerning whether all exchanges and occasions that ought to have been recorded have been recorded.

? Accuracy, for example, to frame a supposition with reference to whether sums and other information identifying with recorded exchanges and occasions have been recorded suitably.

? Cut-off, for example, to frame a supposition with reference to whether exchanges and occasions have been recorded in the right accounting time frame.

? Classification, for example, to shape a feeling in the matter of whether exchanges and occasions have been recorded in the correct records.

• Observation of the inventory
? An inventory observation is the oversight of a client’s inventory counting process by an outside auditor.

This oversight work includes a number of tasks, including the following:

? Verifying that all inventory was counted

? Testing a sample of the counts made by client employees

? Reviewing the client’s counting policies and procedures

? Reviewing the extended cost calculations made by employees

e) Describe the audit work you will carrying out to determine the net realisable value of
the inventory you have found from your investigations in part d).
• Cost of inventories

• Test check

• Net realizable value of inventories

• Investigations of the original sample

• Ensure all the work is performed

Question 2:
a) List and briefly describe the audit tests you would carry out to verify trade receivables at the year end – you are not required to describe how would carry out a receivables’ circularization

• A rundown of transactions of the month
? A rundown of transactions for the month is to record the exchanges of receivables. All transactions are plainly recorded in the rundown of transactions for the months.

? For case, for a rundown of transactions for the month is put resources into the business, cost of products sold, purchases equipment, account receivables, account payables and others.

? Verification of the genuineness of trade receivables can be utilized as the cut-off.

• An aged list of balance
? The period of records receivable is a scope of reports used to monitor clients who have not paid their bills and to record credit reminders. The againg report is additionally an apparatus to encourage clients to pay their obligations early and figure out which invoices are past due.

? A matured rundown of balances has recorded the receivables how much cash is possessed and to what extent the date of installment has passed will be recorded in detail.

? For illustration, if the installment term is 30 days, the date extend in the furthest left-most list be 30 days, and those more than 30 days won’t be set in the furthest left-most list. The second rundown will be 31 to 60 days, and the third rundown will be 61 to 90 days to tweet. On the off chance that the 31-day old receipt shows up in the second show, it speaks to past due installments

b) Explain the difference between positive and negative circularisation

• A positive circularisation

? Consists of letters sent to an example of exchange receivable clients who are requested to affirm, specifically to the reviewer, the precision (or something else) of the expressed adjust as appeared in the review customer organization’s exchange receivables record for the subject client. Where clients can’t help contradicting the expressed adjust they are solicited to express the nature from their disagreement.

? For instance, if an individual or business substance is chosen for a review by the Internal Revenue Service (IRS), the citizen must create records to insist the data recorded on the selected tax returns.

? This incorporates positive affirmation of all wellsprings of pay, check of pertinent findings taken, and confirmation of guaranteed additions or misfortunes. Even if the data required for the review matches what was accounted for, all confirmation must be submitted to fulfil the review necessities. Auditor should perform follow up procedures if the indebted person does not answer.

• A negative circularisation

? Consists of letters sent to an example of trade receivables customers, who are requested to respond directly to the auditor, just in the event that they can’t help contradicting the expressed adjust as appeared in the review customer’s exchange receivables record for the subject client.

? Negative circularisation is all the more usually utilized if the person’s or business’ records are for the most part thought to be exceedingly precise by nature, regularly in light of stringent interior necessities or business rehearses.

? Negative circularisation is more affordable than positive circularisation, in light of the fact that there will be no second affirmation ask for and no subsequent strategies.

? Negative circularisation is normal utilized for all intents and purposes for reviews of clinics, retail locations, banks, and different businesses in which the receivables are expected from the overall population.

? A negative circularisation is intended for use in circumstances where a customer organization’s interior controls are as of now thought to be very solid, with the goal that the affirmation procedure is utilized as an optional review strategy for the records under audit.

c) Describe the audit work you would carry out on the following replies to a positive receivables’ circularisation:

i. Balance agreed by receivables
• If balance concurred by receivables so you don’t need to change or adjust it.

• Review cash receipts.

ii. Balance not agreed by receivables
• Let the client adjust their balance until the point when the adjust can be concurred with the client’s balance and afterward check if there is anything to change.

• You can verify whether you have made any of these errors, for example, Just timing contrasts of mistakes or controls, which can be disregarded directly.

• Reconciling items.

iii. Receivables does not reply to the circularisation
• If you don’t get a reply the auditor has not possessed the capacity to affirm the presence of the debtor, you can just experience different projects. You can’t disregard the problem since you haven’t gotten a reply.

• For case, you can check marked purchase orders and check the money got from clients.

• Obtain the confirmation

• Investigate subsequent cash receipts

Question 3:
From the scenario below identify features which might cause you to have doubt about Layer Max Co going concern status.
The highlights which cause to have doubt about Layer Max co going concern status:
• Fall in gross profit margin accomplished (w1)
? The gross profit margin in 2016 is 9.2%, it drops to 7.0% out of 2017. In 2017, there is the fall in revenue that is result in fall in gross profit margin. At the point when the expenses appear to be steady and expanding interest costs because of the bank credit and back rent will keep on being an issue in going concern. The Layer Max Co. will hard to make profit in future.

• Losses $249,000
The organization has been recorded noteworthy misfortunes which are $249,000 in Draft 2017 contrast with Actual 2016. The noteworthy misfortunes caused by the loss of long-standing client. The organization will discover troublesome in make transactions with the bank. These noteworthy misfortunes may effect on bank overdraft. Subsequently, it might influence the organization to proceed with its tasks.

• Increased receivable adjust and expanded in long stretches of receivable (w2)
? There is an expanded in long stretches of receivable in 2017 which is 98.9 days from 74.8 days in 2016. The expanded in long stretches of receivable may causes cash flows issue out organization such as the organization does not have enough cash to pay use. The expansion in average debt gathering period might be caused by hopeless receivable from the significant client lost in the year. Along these lines, the gone receivable may turn out to be bad debts written off. This would cause expanded misfortunes.

• Decreases in current ratio or liquidity ratio (w3)
? The liquidity proportion in 2016 is 1.05; it drops to 0.88 out of 2017. This may causes issue in going concern status of Layer Max Co. Right now, the organization has expanded in long periods of receivable. There is plausibility the organization may require to make allowance for irrecoverable receivables. This may exacerbate the liquidation status of organization. The organization as of now has loan and finance lease commitments which plausible may not be met.

• Increased in Gearing ratio ( w4)
? The gearing ratio is 0.87 of every 2016; it expanded to 1.33 out of 2017. As a rule, the increments in equipping proportion are bad news to any organizations. This implies the organization resolve to intrigue which could influence the future benefits. The organization may have issue in arranging new finance arrangement with lenders.

• Increasing reliance on short term finance
? The organization has been expanding reliance on short term finance in 2017. This short term finance does not anchor the future in light of the fact that the organization experiencing numerous change such as the organization have exacerbating in liquidation ratio, implies it might have troublesome in payback to banks. This may cause an issue for bank overdraft office arrangements.

• Loss of long-standing client to contender
? This may build the danger of not gave competitor irrecoverable receivables in the financial statement. This is consequence of plausibility of increments in potential other client could go with the same pattern. Thusly, it influences the organization’s future prospects.

• Loss of business clients
? The business clients are given customary salary to organization. The customary wage used to reimbursement responsibilities by organization. In the event that the loss of business clients may causes huge effect on reimbursement responsibilities of organization. These outcomes in issues in cash flow of organization.

• Draft financial statement (last alterations are extraordinary)
? The net asset position of organization could be intensified impressively, if non-current resources are composed down to written down to recoverable amount is composed down to net feasible esteem. Besides, the terrible obligations arrangements might be fundamental has said previously. The conclusion may important to incorporate excess arrangements. All these extra change impressively could build misfortunes in organization.

• Overdraft facility to be looked into 3 months after the year end
? The three months’ time frame is presumably not sufficiently long to distinguish a genuine change in the organization’s fortunes. The vulnerability matters must be reports to banks. As evaluators, we would attempt to foresee the bank’s presumable response to money related proclamations would be a high hazard.
Workings:
1. Draft year 2017
Gross profit = Gross profit / sales
= $768,000 / $10,971 × 100%
= 7.0%
Actual year 2016
Gross profit = Gross profit / sales
= $1,086,000 / $11,560,000 × 100%
= 9.4%
2. Draft year 2017
Days of Receivable = (Account receivable / Revenue) ×365 days
= ($2,975,000 / $10,971,000) × 365 days
= 98.9 days
Actual year 2016
Days of Receivable = (Account receivable / Revenue) ×365 days
= ($2,369,000/$11,560,000) ×365 days
= 74.8 days

3. Draft year 2017
Liquidity ratio: Current Ratio = Current assets / current liabilities
= $3,070,000 / $3,481,000
= 0.88
Actual year 2016
Liquidity ratio: Current Ratio = Current assets / current liabilities
= $2,430,000 / $2,307,000
= 1.05
4. Draft year 2017
Gearing ratio = Total debts / Total equity
= $4,704,000 / $3,544,000
= 1.33
Actual year 2016
Gearing ratio = Total debts / Total equity
= $3,307,000 / $3,793,000
= 0.87

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