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Auditing: - Explain ONE duty of an internal auditor - NSC Accounting - Question 4 - 2023 - Paper 1
Question 4
Auditing: - Explain ONE duty of an internal auditor. - Give ONE reason why the accounting records of a listed company must be audited by an external auditor. Whis... show full transcript
Worked Solution & Example Answer:Auditing: - Explain ONE duty of an internal auditor - NSC Accounting - Question 4 - 2023 - Paper 1
Step 1
Step 2
Give ONE reason why the accounting records of a listed company must be audited by an external auditor.
Answer
The accounting records must be audited by an external auditor to ensure compliance with the Companies Act. This act provides assurance that the company adheres to accounting principles and is transparent in its financial reporting.
Step 3
What would you say to Sally regarding her statement in the first paragraph about whistle-blowers not being willing to take a stand against corruption? Explain ONE point.
Answer
I would explain to Sally that it is understandable for individuals to feel victimized when they report wrongdoing. However, it is essential for whistle-blowers to come forward, as their actions can help prevent further corruption and protect the interests of the public and the company.
Step 4
As a shareholder, explain THREE points that would concern you about the actions of the board of directors of Monaco Ltd. In EACH case, give a suitable reason for your concern.
Answer
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No protection for whistle-blowers: This could lead to a fear of retaliation among employees who witness wrongdoing, ultimately stifling transparency.
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Collusion with service providers: If directors collude with vendors, it can compromise fair competition and lead to financial losses for the company.
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Poor accountability measures: If directors are not held responsible for their actions, it can reduce overall performance and harm shareholder trust.