8F

AUD689: AUDIT AND ASSURANCE SERVICES

DEC 2016 QUESTION 1
PREPARED FOR: PUAN KHAIR SYAKIRA

PREPARED BY:
1. AHMAD ASYRAFF SYAHMI BIN MOHD NASIR
2. ARIFF ASHRAAF BIN NORZIHAN
3. FAIZ IZZARUDIN BIN SHAMSUDIN
4. NURUL NADHIRAH BINTI MUHARAM
5. WAN NURAFINI FITHRIYAANI BINTI ABDULLAH
Q1) An auditor will have a statutory and
professional responsibility under section 174
of companies at 1965.

Explain the duties of auditor as stated in section 174 of the act.

Explain two rights or powers of auditors as stated in the above section.
Question 2

Describe THREE ethical issues found the above case.

Explain the possible safeguard that the auditor should have taken in order
to properly discharge their professional responsibilities that have arisen in
the above case.
Describe three ethical issues found the
above case.

Corts Bhd Financial difficulties

(Client)

Audit
engagement
6 years

Azman & Partners

(Auditor)
Supply furniture
worth 70%
Answers
Q1 (i) Section 174 - Duties

Auditors duty to make a report to members on the accounts & the

companys accounting and other records relating to those accounts in
the general meeting
Duty to express an opinion in his report:
True & fair view of the accounts as required by S169
Books, records and register are properly kept
Disclose names of subsidiaries of which he is not the auditor
Duty to report of any defects, irregularities in the accounts
Contd

Auditors duty to form an opinion as to each of the following matters

To ensure that he has obtained all the information and explanation
To ensure that proper accounting and other records have been kept by the
company
To ensure that returns received from branch offices of the company are
adequate
To ensure that procedures & method used by the holding or subsidiary were
appropriate to the circumstances of the consolidation
To attend any general meeting & to receive all communications relating to any
general meeting which may concern the auditor in his capacity as auditor
Q1 (ii) Section 174 Rights or Powers of
Auditor

A right of access at all times to the books & records

A right to information & explanation he considers necessary
A right to attend any general meetings that concerns him as an auditor
A right to make written representations when the company proposes to
dismiss him as an auditor
To attach auditors report to annual report and to be read in General
meeting
Q2 (i) Ethical issue

Familiarity Self-interest Intimidation

threat threat threat
Q2 (ii) - Explain the possible safeguard that the auditor should
have taken in order to properly discharge their professional
responsibilities that have arisen in the above case.

The partner of the firm or auditor shall retained the financial statement
audited until the client can pay.
Report the client company as a disclaimer opinion as they have difficulties
in financial and going concern problems.
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