Tutorial questions Not for profit entities

Question 1
Compare the statutory audit process to the audit process involved in a VFM (3 Es) audit.

Question 2
Donate is a local East London charity. Among their fundraising activities they have donation
boxes that are located in local shops, cafes and restaurants. Recently there have been a number
of thefts of these boxes or of the cash from inside them.
Required:
List 4 internal controls that you would expect over systems of cash donations through
collecting boxes.

Question 3
List the key factors that the statutory auditors should consider when assessing inherent risk at the
planning stage of the year end audit of Tigerfeet, a not-for-profit entity aiming to save the tiger
through lobbying against destruction of their territory. Tigerfeets main source of income is from
grants, donations from the public and investment income.

Question 4
Aqua Ltd is a charity that digs wells to bring clean water supplies to remote villages currently
without a water supply. It generates funds from:
1) Donations made by members of public
2) Government grants
Aqua has recently contacted their auditors (where you work) to enquire out about a value for
money audit.
Required
a) Explain what a value for money audit is in reference to the 3 Es.
b) Give two examples of for each of the 3 Es on factors that the auditors would
consider if they were to perform a VFM audit for Aqua.