Question 3
ICAN
•
2024
•
AUDIT AND ASSURANCE
•
mixed
Case Stimulus
You are the Audit Senior-in-charge of the audit of Edinburg Nigeria Limited. The management of the company made some representations to you, which include:
- Inventory worth ₦15 million in its only branch in Niger Republic, which you couldn't visit because of the ongoing civil unrest in that country;
- A donation of ₦500,000 was made to a motherless babies home by the Chairman but it was not receipted; and
- The chairman received medical treatment amounting to ₦600,000 during his official visit to Germany to negotiate with equipment vendors, and he did not come back with any documentary evidence.
You have reported these matters to the partner of your firm, Olumisi Oregun & Co.
Requirements
(
a
)
Explain TWO reasons for obtaining letters of representation from clients' management.
(
b
)
Explain THREE steps you will take if a representation by management is contradicted by other audit evidence.
(
c
)
Draft a letter of representation, which the management of Edinburg Nigeria Limited will present to your firm.
Detailed Solution & Marking Scheme
Get the step-by-step solution,
key points required by examiners
and detailed marking guidance
through the Edcrib AI Tutor.
Reveal Answer
About This Question
This is
Ican
2024
Audit And Assurance
Question 3.
It is one of the
mixed
questions from the
2024
Ican
Audit And Assurance
examination.