Discuss the main types of auditing according to its objectives with giving examples for each type. Your answer for each type should include its purpose, to whom it is provided and who is eligible to conduct it.

COVID-19 FoMLSS/ Accounting and Finance Auditing,

AFE5009-B (Individual Coursework)

INSTRUCTIONS TO CANDIDATES

This is an individual assignment with a limit of 3,000 words. This Individual Coursework constitutes 100% weighting of the grade for this module.  Format:  A typed electronic submission on the Canvas.  General alignment: justified. This individual assignment consists of 3 Questions. Answer ALL the Questions 2 | P a g e COVID-19 Answer the following questions

Question 1 A. Discuss the main types of auditing according to its objectives with giving examples for each type. Your answer for each type should include its purpose, to whom it is provided and who is eligible to conduct it. (10 marks) B. Discuss the FOUR regulatory layers of the audit profession in the UK. Your answer should include the role of each regulator with giving examples. (10 marks) C. Discuss three types of opinion that auditors can express in their audit reports with giving an example of when each type should be used. (10 marks) Total 30 marks Question 2 A. Discuss Five ethical principles that auditors should comply with according to the UK ethical standards. (10 marks) B. You have been given the information below for one of your audit clients: “In the next year, the company intends to undertake a stock exchange listing. The company has spent $2m on the development of new product lines which is included within intangible assets. Additionally, it purchased and installed a new manufacturing line. All costs, incurred in the purchase and installation of that asset, have been included within property, plant and equipment. In order to finance the new manufacturing line, the company issued $3m of irredeemable preference shares. The company offered extended credit terms to its customers. In addition, it provided a ‘price promise’: that it would match the prices of any competitor for similar products purchased within one month of the date of purchase. During the year, a product recall has been initiated for one product as a result of faults in the production process. Required Using the information provided, describe Five situations where audit risks are existed and explain the auditor’s response to each risk in planning the audit process. Note: Prepare your answer using three columns headed The Issue, Audit risk and Auditor’s response respectively. (25 marks) Total 35 marks 3 | P a g e COVID-19 Question 3 A. Auditors need to assess the effectiveness of the internal control system of their clients as part of the audit procedures that need to be conducted before setting the audit plan. Discuss FIVE main characteristics of the good internal control system and how they can be used in the auditors’ assessment with giving examples. (10 marks) B. Apple & Co has been an audit client of your audit firm ANWAR & Co for the last Eight years. The audit staff of ANWAR & Co and the client staff of Apple & Co have always celebrated a meal together at the beginning of the final audit process. The finance director of Apple & Co has suggested this year that both staff can go away for the weekend – instead of the meal – to a luxury hotel at Apple & Co expense. The finance director has also suggested that the current year audit fees is negotiated to be a percentage of Apple & Co net profit for the year. This year, for the first time, Apple & Co has approached your audit firm to help in promoting the process of issuing shares – of Apple & Co – in the stock market. Discussions now are at the early stage and no actions has been taken yet. The total fees of the audit and other work would fall within acceptable levels in line with applicable code of ethics. The financial manager of Apple & Co requires this year that their audit to be completed within 15 days; however, this is a very busy time for your audit firm and so it is intended to use more junior staff as they are available. Additionally, in order to save time and cost, ANWAR & Co have not contacted Apple & Co’s previous auditors. Required: Identify and explain FIVE situations where ethical threats which arise from the above action are existed; and for each ethical threat explain the steps which ANWAR & Co should adopt to reduce the threats arising. Note: Prepare your answer using three columns headed The Issue, Ethical threats and Auditor’s response respectively. (25 marks) Total 35 marks