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Please answer ALL Questions after fully viewing the False Assurance case video.

1. For each of the three persons as shown in the photographs below – please answer the respective questions posed below – after you have fully watched the video:

Person A Who is this man? What is his role?
What is he responsible for?
Who is he responsible to?
(1 mark)
Person B Who is this lady? What is her role?
What is she responsible for?
Who is she responsible to?
(1 mark)
Person C Who is this lady? What is her role?
What is she responsible for?
Who is she responsible to?
(1 mark)

2. State the responsibilities of TYSL Accountants in relation to prevention and detection of frauds and errors in D-MERTON (2 marks).

3. Identify and briefly describe TWO inherent risks, and TWO control risks of D-MERTON and explain how TYSL Accountants have responded to each risk, in planning the audit of D-MERTON (4 marks).

4. Identify and explain THREE ethical issues which may affect the independence of TYSL Accountants’ audit of D-MERTON and for EACH issue explain how it might be reduced to an acceptable level. (3 marks)

5. How would the cancellation of the product, S1D system affect D-MERTON’s financial position and the year end audit plan of D-Merton? How will it affect the value of the company’s technology? (3 marks)

6. Do you believe that Sarah Hancock has exercised her duty of care as the audit partner?
If your answer is YES, please explain your reasons.
If your answer is NO, please explain reasons and what should she have done differently?
(5 marks)


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