AFM312 Assignment 2

Question  1

• a) Identify the  factors  that  would  affect  the  preliminary assessment  of inherent risk and control risk at Queen Island Dairy.
• b) Explain how  these factors  would  influence your  choice   between the predominantly  substantive  approach   and   the   lower   assessed  level   of control  risk approach  for sales, inventory and debtors.

Question  2

• a) What key assertions for the above accounts are likely to be affected?
• b) Explain what evidence would be persuasive in this case.

Question  3

• a) Make a  list  of  the  potential  problems that  could  occur  in  Powersys’ Maintenance and improvements program.
• b) Suggest ways  that  good  internal  control   over  parts,  equipment  and labour could help Powersys’ avoid these problems.