Amendment 1 to the case study

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Substantive Test
Due to the moderate control risk identified, the audit team decided to concentrate more on the analytical review with the objective to gather audit evidence. During the performance substantive testing on the balances and on the class of transaction of inventory, the audit team discovered the following unrecorded transactions and to propose further adjustments to the management.

(a) Provision of Audit fees and tax fees for the year ended 31 December 2010 amounted to RM3,500.00 and RM2,500.00 respectively were not provided in the book of accounts. (a) After searching for unrecorded liabilities, a purchase invoice dated 24 December 2010 amounted to RM1,500.00 to UnMo Enterprise was not accounted for but it is included in physical stock-take. (b) Allowance for doubtful debt are to made at RM550.00 (c) Credit sales on 21 November to KaKa Trading amounted to RM3,000.00 was not included in the financial statement. The physical units of the sales was deducted from the inventory at the year end. (d) Upon completing the audit assignment, the audit team has submitted the audit files to the tax department for computing the actual tax expenses of LSSB for the year assessment 2010. Having those figures ready, the audit team will make the necessary adjustments to final accounts.

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7. Prepare the Audited Financial Statements of Lada & Saus Sdn. Bhd for the year ended 31 December 2010 in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Companies Act. 1965 together with Directors Report, Statement by Directors, Statutory Declaration and Audit Report the following notes to financial statements:

a. Significant accounting policies b. Property, plant and equipment c. Inventories d. Trade receivables e. Share capital f. Hire purchase creditors g. Bank borrowing h. Profit before tax i. Contingent liabilities (if any) j. Capital commitments (if any)