Essay ACT3301 – Audit – Your Audit Firm is TAF & Co – KURMA SEJUK Sdn Bhd – Auditing Assignment Help

Assignment Task

 

Background:
Your audit firm is TAF & Co (you can change your firm’s name). You have been assigned one audit job on KURMA SEJUK Sdn Bhd (KSSB) for the year ended 31 December 2020. The client has provided the relevant data and documents for the audit.
Your manager has asked you to perform audit of PPEs, Cash, Account Receivables / Trade Debtors and Account Payables / Trade Creditors accounts. Therefore, you are required to prepare audit working papers (with proper audit index, tick marks and cross-referencing) for documenting all relevant audit procedures that are performed on all items related to those accounts. However, before the audit work can be commenced, your manager also asks you to prepare an audit program for the job.
Information Concerning the PPEs, Cash, Account Receivables / Trade Debtors and Account Payables / Trade Creditors accounts:
Your client provided the following information concerning the events or transactions occurred during the financial year end 31 December 2020.

FIXED ASSETS
List of fixed assets and depreciation amount is in the fixed asset register attached in Appendix A- Fixed Assets.
The Photocopy machine (Xerox 4350×5 Model 2000) has not been used for one year because the spare part is no longer available in the market. The purchase price was RM10,000 and it has been fully depreciated since 2005. There is no residual value for this machine.
In February 2020, KSSB acquired a new vehicle for the company’s transportation purpose. KSSB purchased a Perodua Ativa and registered under the company’s vehicle usage. The price per unit was RM72,000. KSSB has obtained a loan from Bank Muamalat using a hire purchase facility of RM50,000. The vehicle was registered under the KSSB’s director name, Encik Edika Yahya. The vehicle ownership certificate (VOC) is attached in Appendix B-Fixed Assets.
The KSSB company’s building has taken on a new look in 2020 by repainting and adding a new mural painting which amounted KSSB RM30,055. This cost was capitalised in the accounts as building renovation in 2020. No depreciation was allocated to this item so far.
The company’s policy on fixed asset capitalisation is to capitalise as an asset, any capital expenditure above RM3,000. The motor vehicle will be depreciated at the rate of 20% per year. In addition, the depreciation will be made for a full year of purchase regardless of the date of purchase.

ACCOUNT PAYABLES
KSSB has recorded RM990,001 and RM170,249 account payables as at 31 December 2020 and 2019 respectively. The following is information concerning the current year account payables.
KSSB has made payment to LLL Sdn Bhd amounting to RM65,000. The payment is for partial payment of outstanding debts. The payment voucher number of PV99877 was issued on 31 December 2020 because the payment was transferred using electronic fund transfer on the same day.

INDIVIDUAL ASSIGNMENT REQUIREMENTS
Your client, a medium-sized manufacturing company, has prepared a flowchart (APPENDIX H), which portrays the raw materials purchasing function, from the preparation of initial documents through the vouching of invoices for payment in accounts payable. Assume that all documents are pre-numbered. As the auditor of that client, you are asked by your audit senior to review the raw materials purchasing function and are requested to identify deficiencies in internal control of the function. You may use Transaction Related Audit Objectives for a guidance in reviewing the internal control.
This individual assignment is worth 10% of the total course assessment, and assesses the PLO of Technical Skills, of which the rubric is attached as per Appendix I.