2014 Papers

Risk 1: Mining license possibly approaching expiry date / unused

Account: Mining license
Assertion: Existence / V&A
Test of Detail: Pick a sample of mining licenses held and check if still valid / impairment value given
impending expiry

Risk 2: Fluctuation of forex may impact revenue as gold is priced in US

Account: Forex reserve
Assertion: V&A
TOD: Pick a sample of days and check the rate is correct based on quoted prices

Risk 3: Royalty payable subject to many variables

Account: Royalty payable
Assertion: Completeness
TOD: Pick a sample of mining licenses and check calculation is included correctly in ledger

Risk 4: Diesel fuel price hedging is difficult

Account: Fair value of financial instrument
Assertion: V&A
TOD: Review the work performed by accounting staff in assessing hedge effectiveness – employ an
expert if derivative contract is beyond the scope of basic accounting

Risk 5: Slowing production

Account: PPE
Assertion V&A/Accuracy
TOD: Review the depreciation calculations to check whether the useful lives reflect their new
shortened useful lives

Risk 6: Theft
Account: Inventory
Assertion: Existence
TOD: Pick a sample from ledger and physically sight

Risk 7: Error in according to system breakdown (note it says both sales and sales prices)
Account: accounts payable
Assertion: completeness/occurrence/V&A
TOD: For sample of shared transactions, determine whether the correct portion of the ticket has
been allocated in accordance with agreement

GAS

Completeness of Cash – Sequence test and report any missing numbers. Then go and check if they
actually exist.

Occurrence of Sales – Exception report listing all sales invoices that have a customer number that
doesn’t occur in 10. Then go find sales invoices with invalid customer number and check if they
have wrong customer number or if they are real.

V&A of Accounts Receivable- Have GAS perform a debtors aging using process using most recent
payment date then compare them to the output of the company for provision of doubtful debts.
Some other random papers

Risk 1: Drop in asset price

Account: Inventory
Assertion: V&A
Test of Detail: Check recent sales of discounted stock to ensure cost does not exceed net realisable
value

Risk 2: Large net borrowings may indicate understatement

Account: Borrowings
Assertion: Completeness
TOD: For a sample of loans check it is included in borrowings

Risk 3: Increase in revenue contradicts evidence that newspaper reports of difficulties

Account: Sales Revenue
Assertion: Occurrence
TOD: For a sample of sales check in the ledger if it has dispatched

Risk 4: Fluctuation in prices

Account: Asset
Assertion: V&A
TOD: For a sample of these agricultural assets review market prices at the end of year and assess
impact various factors have on the FV determined by management

Risk 5: Fluctuation in FX may result in incorrect use of fx rates

Account: Forex Reserve
Assertion V&A
TOD: for sample of transactions, ensure correct fx rate has been used

Risk 6: Incorrect shipping may result in higher level of returned goods

Account: Provision for returns
Assertion Completeness
TOD: Review assumptions of management and determine whether all likely returns have been
included

Risk 7: Error in according to system breakdown (note it says both sales and sales prices)
Account: accounts payable
Assertion: completeness/occurrence/V&A
TOD: For sample of shared transactions, determine whether the correct portion of the ticket has
been allocated in accordance with agreement