- Beneficiary under documentary credits – bank can lend customer who exports under documentary credit to enable supply of goods for exports transactions.
- Medium term supplier credit – the supplier can give credit for between 2-5yrs. The bank should be refunded up to 85% of the transaction if it provides finance. 15% is taken in advance.
- Discounting bills of exchange – banks will discount accepted bills of exchange up to 100%. UK bank accepts the bills under documentary terms of credit for payment at future date.
- Advances against bills of exchange collections – banks will lend up to 100% against bills. The bills will be hypothecated to the bank as security.
- Negotiations of foreign bills of exchange – bills of 4xchange can be bought by the bank with resource up to 100% of bills of face value.
- Smaller exports scheme – banks provide non resource finance under an umbrella policy held by the bank. Banks policy will pay out export transaction.
- Short term finance for exports – this is where buyers can benefit from the credit terms up to 2yrs for customers with larger turnover and their own credit polices
master nyamai answered the question on September 10, 2018 at 10:11
- Explain the following terms: (a) Materiality; (b) The duty of confidentiality; (c) Professional indemnity insurance; (d) Peer review; ...(Solved)
Explain the following terms:
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(b) The duty of confidentiality;
(c) Professional indemnity insurance;
(d) Peer review;
(e) Quality Control.
Date posted: August 13, 2018. Answers (1)
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a) Do you believe that the auditors should be responsible to users other than the shareholders? Give reasons to support your answer.
b) Does the auditor require a codified definition of “reasonable care and skill” or should this be left to professional judgment? Explain.
c) Why should the auditor be unwilling to take full responsibility for the detection of fraud during the annual audit? Explain.
d) Discuss the proposition that the „expectations gap? has arisen because of the public?s ignorance and should therefore be resolved by the public themselves.
Date posted: August 13, 2018. Answers (1)
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Date posted: August 10, 2018. Answers (1)
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c)...(Solved)
Explain how you would verify the following: a) Investment income.
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Date posted: August 8, 2018. Answers (1)
- Audit planning process allows the audit senior to acquire adequate knowledge about the entity. This process ensure an effective control of audit work. ...(Solved)
Audit planning process allows the audit senior to acquire adequate knowledge about the entity. This process ensure an effective control of audit work.
Required:
a) Explain the auditor's planning process when planning for an audit of a new client. b) How does audit planning assist in the conduct of an audit?
c) Explain the following controlling procedures in a well planned audit:
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Date posted: August 8, 2018. Answers (1)
- You are the manager responsible for the audit of ABC Company, which has...(Solved)
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Required
a) State the matters you would consider in planning the audit, prior to the commencement of the detailed audit work. b) Describe the way in which you would control the audit from the commencement of the work by the audit staff to the review stage by the partner immediately prior to him signing the audit report
Date posted: August 4, 2018. Answers (1)
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i. Application controls;
ii. ...(Solved)
a) In the context of a computer based accounting system, explain the meaning of the following terms:
i. Application controls;
ii. General controls
b) Explain the importance of having proper systems documentation
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Date posted: August 4, 2018. Answers (1)
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(b) What is the importance of...(Solved)
(a) Briefly explain the meaning of the term "control procedures".
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(ii) Trade creditors in a company's financial statements.
Date posted: August 4, 2018. Answers (1)
- Your firm is the auditor of Shah Engineering Ltd, and you have been...(Solved)
Your firm is the auditor of Shah Engineering Ltd, and you have been asked to suggest the audit work you will carry out in verifying trade creditors and purchase accruals at the company’s year-end of 31 December 2003. You attended the stock take at the year-end. The Company operates from a single site and all raw materials for production are received by the goods inwards department. When the materials are received they are checked for quantity and quality to the delivery note and purchase order, and a multi—part goods received note is made out and signed by the storekeeper. If there are any problems with the raw materials, a discrepancy note is raised which gives details of the problems (e.g., incorrect quantities or faulty materials) The purchase accounting department receive the purchase invoice, check them to the purchase order and goods received note and post them to the purchase ledger. At the end of each month, payments are made to suppliers. The purchase ledger is maintained on a microcomputer. The main sundry creditors and accruals at the year-end include:
a) Wages accruals and PAYE;
b) VAT;
c) Interest on loans overdrafts, telephone and electricity. Most employees’ wages are paid weekly in arrears.
You are required to describe in detail the audit work you will carry out to:
a) Check suppliers’ statements to the balances on the purchases ledger;
b) Verify that purchases cut-off has been correctly carried out at the year end.
c) Ensure that sundry creditors and accruals are correctly stated;
Date posted: August 4, 2018. Answers (1)
- You are carrying out the audit of ACB Computers limited for the year...(Solved)
You are carrying out the audit of ACB Computers limited for the year ended 31 December 2003. The company assembles microcomputers purchased from the Far East and sells them to retailers, and to individuals and other businesses. In the current year, there has been a recession and strong competition, which has resulted in a fall in sales and the profits. This has led to a trading loss and the company is experiencing going concern problems.
Required:
a) Describe the factors, which indicate that a company may not be a going concern. Your list should include all factors and not just those, which relate to ACB Computers Limited.
b) Consider the form of audit report (i.e. qualified or unqualified) you would issue of ACB Computers limited if you conclude that the company is experiencing serious going concern problems, in the following two situations: I) You conclude that the financial statements give sufficient disclosure of the going concern problems.
II) There is no disclosure of the going concern problems in the financial statements and you believe there is a serious risk that the company will fail in the foreseeable future.
c) State the parties who may successfully sue you as auditor for negligence, and consider the arguments you could include in your defense when: I) The financial statements of ACB Computers Limited for the year ended 31 December 2003 do not mention any going concern problems and your audit report on these financial statements was unqualified and II) The company fails on 15 February 2004
Date posted: August 4, 2018. Answers (1)
- The responsibilities of external auditors are not always well understood, especially
with regard to the detection and reporting of fraud. When external auditors provide
non-audit...(Solved)
The responsibilities of external auditors are not always well understood, especially
with regard to the detection and reporting of fraud. When external auditors provide
non-audit services to their audit clients, it is essential that the auditors make a clear
distinction between their audit and non-audit responsibilities.
Required:
a) Explain the responsibilities of external auditors to directors and shareholders
b) Describe the limitations of the external audit in relation to the detection and
reporting of fraud.
c) Explain why it is essential for external auditors to be independent of their clients.
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Date posted: August 4, 2018. Answers (1)
- Towards the end of an audit, it is common for the external auditor to seek a letter of
representation (written representations) from the management of the...(Solved)
Towards the end of an audit, it is common for the external auditor to seek a letter of
representation (written representations) from the management of the client company.
Required:
(a) Explain why auditors seek letters of representation.
(b) List the matters commonly included in the letter of representation.
(c) Explain why it is important to discuss the content of the letter of representation at
an early stage during the audit.
(d) Explain why management is sometimes unwilling to sign a letter of representation
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Date posted: August 4, 2018. Answers (1)
- a) Internal control systems are designed, amongst other things, to prevent error and
misappropriation.
Required:
Describe the errors and misappropriations that may occur if the following are not
properly...(Solved)
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misappropriation.
Required:
Describe the errors and misappropriations that may occur if the following are not
properly controlled:
(i) Receipts paid into bank accounts;
(ii) Payments made out of bank accounts;
(iii) Interest and charges debited and credited to bank account
(b) A book-selling company has a head office and 25 shops, each of which holds cash
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external auditor to the company for many years and has offices near to the
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Required:
List the audit objectives for the audit of cash and state how you would gain the audit
evidence in relation to those objectives at the year-end.
c) The external auditors of companies often write to companies’ bankers asking for
details of bank balances and other matters at the year-end.
Required:
Explain why auditors write to companies’ bankers and list the matters you would
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Date posted: August 4, 2018. Answers (1)
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Sh.
stock on 1st January 2007 48,000
Raw materials 9,800
work in...(Solved)
From the following information prepare a cost statement clearly showing the various components of the cost of production (20 Marks)
Sh.
stock on 1st January 2007 48,000
Raw materials 9,800
work in progress 120,000
finished goods 148,000
wages paid to the factory workers 52,000
factory insurance 400,000
plant balance on 1st January 2007 180,000
factory rent 200,000
cleaning costs 350,000
purchase of raw materials
stocks at 31st December 2007
Raw materials 21,000
work in progress 6,000
carriage on raw materials 42,000
return of raw materials to suppliers 6,200
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fixed admission expenses 140,000
salesman commission 60,000
Date posted: June 20, 2018. Answers (1)
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