Answer- QUESTION 3 ONLY!!! NO INTRODUCTION NO CONCLUSION 600 words ((IGNORE QUESTIONS 1 and 2))

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Group Assignment /Fall-2020
COLLEGE OF BANKING AND FINANCIAL STUDIES
DEPARTMENT OF UNDERGRADUATE PROGRAMME
B.Sc. in Accounting, Auditing and Finance
ASSIGNMENT BRIEF- Group Work
Weightage: 20 %
Student Name & ST Number 1.
2.
3.
4.
5.
Semester FIVE FALL-2020
Assignment Title Audit risk and testing of Internal control
Module Audit and Corporate
Governance
Assessor: Ms. Sujata Suresh
Start Date: 20.11.2020 Internal Verifier Ms. Sujatha Bhat
Due Date: 9.12. 2020(FF)
20.12.2020(SF)
Required Work, Format and Grading
You must submit the following by the assignment due date:
▪ Completed answers to each task, making sure that you fully address each of the outcome
criteria.
▪ Answer all questions separately.
▪ Assignments without TURNITIN report will not be accepted.
Resources:
You need to demonstrate a confident application of the theories to the assignment task. The theoretical
underpinning of your observations and deliberations should also demonstrate a good understanding of
the subject by the way that your analysis is structured.
You can access the Internet to research about the topic. You should demonstrate good academic
practice by the appropriate use of academic texts and journals that are properly referenced.
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Group Assignment /Fall-2020
Guidelines and further information about assignment:
Assignment must be submitted with the “Turnitin” report. If the report generated indicates a
similarity index percentage of 20% or more, a review of your assignment is necessary to
ensure the same is reduced to less than 20%.
Student declaration:
I certify that the work contained in this assignment was researched and prepared by
us:
Signature: ___________________________ Date: ___________________
The user ID and Password for submitting the soft copy of the report
through TURNITIN is as follows:
Class ID: _27000202_ Enrolment Key: Evening 2020
Submission time and date
You should submit the assignment by the time and date mentioned otherwise a ‘NA’ will
be awarded. Fill in the form cover and staple it with your assignment. Make sure that all
the relevant details are complete. Assignments must be submitted by the due date. You
may include diagrams, figures etc without word penalty.
Plagiarism Writing
1. Plagiarism occurs if you use somebody else’s work in an assignment or exam
answer but fail to state where you got the material from. You need to be also
very careful about the amount of words you are using from somebody else’s
work.
2. It can happen in any type of assessment where you are given the questions or
tasks in advance.
3. If another student uses your work in his/her answer(s), both you and he/she will
be punished when caught.
4. Punishments for committing plagiarism can be very severe.
Details
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Group Assignment /Fall-2020
Plagiarism is a form of cheating in which students use the work of others and present it
as their own. It may include all or any one of the following –
1. Copy extensively from the work of others (from sources such as books,
magazines, journal, websites etc.) and submit the work as your own.
2. Copy another students’ work and submit it for assessment under your own
name.
3. Allow another student to copy your work and then submit it for assessment
under their own name.
What happens if you get caught?
The examining body of CBFS may punish offending students in any manner that they
deem fit. Typical punishments may range from reduction in grades, making students resit modules and even failing students on a module or an entire award. The college
considers this form of cheating as a serious offence. Therefore, be forewarned!
SCENARIO
You are an audit supervisor of Zodiac &Co and are currently planning the
audit of your client, Pluto Furnitures Co. (Pluto) which manufactures
durable furniture. Its year end is 31 December 2020 and the forecast profit
before tax is RO 29·6 million.
The audit manager has attended a planning meeting with the finance
director and has provided you with the following notes of the meeting
• During the year, the directors reviewed the useful lives and depreciation
rates of all classes of plant and machinery. This resulted in an overall
increase in the asset lives and a reduction in the depreciation charge for
the year.
• The entire decision of revaluing assets and giving instruction to enter
into records is in the hands of Mr. Thomas, the finance director. No bill
passes without his knowledge and all payments and receipts go to his
joint bank account with the company. Mr. Thomas feels that by having
full power in his hand, he cannot be challenged by any other staff of the
company.
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Group Assignment /Fall-2020
• The Finance director has informed the audit supervisor that the bank
reconciliation of October and November contained unreconciled
differences; however, he considers the overall differences involved to be
immaterial.
• Pluto Furnitures Co. decided to outsource its payroll function to an
external service organisation. This service organisation handles all
elements of the payroll cycle and sends monthly reports to the finance
director, which details wages and salaries and statutory obligations.
Pluto Furnitures Co. maintained its own payroll records until 31st
December 2019, at which point the records were transferred to the
service organisation. The service organisation directly contacts the
Finance director Mr. Thomas and takes advices to transfer payments
and fixing the salaries. There are no clear-cut policies within the
company.
• A directors’ bonus scheme was introduced during the year which is
based on achieving a target profit before tax. To finalize the bonus
figures, the finance director of Pluto Furnitures would like the audit to
commence earlier so that the results are available earlier this year.
• Furniture is held in five warehouses and on 28 and 29 December a full
inventory count will be held with adjustments for movements to the
year end. This is due to a lack of available staff on 31 December as all of
them will be busy with New year celebration. In October, there was a
fire in one of the warehouses; inventory of RO9 million was damaged.
An insurance claim has been submitted and Pluto Furnitures Co. is still
waiting to hear from the insurance company with regards to this claim
but has included the insurance proceeds within the statement of profit
or loss and the statement of financial position.
.
• Pluto Furnitures Co. is planning to expand the company by opening
three new showrooms during May-June 2021 Ramadhan and to finance
this, in October 2020 the company obtained a RO 3million bank loan.
This is repayable in arrears over five years in quarterly instalments.
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Group Assignment /Fall-2020
There are no proper documents available in the company regarding the
loan and interest payment and the finance director is confident that he
can easily talk to the bank and arrange to waive the interest payment.
No one in the company has an idea as to how things are going to be
adjusted as the loan sanction papers are with Finance director.
Question1
Based on the above scenario, why is it necessary for Zodiac & Co, to
understand the reasons for planning an audit and do risk assessment.
(6+2 marks for presentation= 8 marks total)
Question2
Examine the test of Controls and steps to be taken by Zodiac &Co to
employ internal control procedures.
(4+1 mark for presentation= 5 marks total)
Question 3
Synthesize the general control strategies and key stakeholder interests and
obligations in internal control practices that should have been taken care of
by Pluto Furnitures Co.
(5+2 mark for presentation= 7 marks total)
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