8/6/2019 Amendment 1 to the Case Study

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Amendment 1 to the case study

Page #12

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.

8/6/2019 Amendment 1 to the Case Study

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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)