Audit Judgment – NBC Institute

AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing

Examining professional skepticism, its necessity across audit stages, and its application in audits.

Question

As a result of recent global financial crises, audit inspection reports in various jurisdictions have noted areas requiring professional judgment. Such areas include fair value, related party transactions, and going concern assessments, where regulators and oversight bodies believe that auditors should clearly demonstrate professional scepticism.

Required:

a. Explain the term “Professional Scepticism.” (3 Marks)

b. Identify the stages in the audit process where professional scepticism is necessary. (3 Marks)

c. Discuss three ways in which the application of professional scepticism can be demonstrated by the auditor. (9 Marks)

Answer

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Tags: Audit Judgment, Audit Process, Fair Value, Going Concern, Professional scepticism, Related Party Transactions
Level: Level 3

Topic: Ethical Issues in Auditing

AA – Nov 2014 – L2 – Q2 – Audit Evidence

Discuss factors affecting sufficiency of audit evidence and audit procedures for current liabilities in Radcliffe Co.

Question

Radcliffe Co.

ISA 500 Audit Evidence states that the objective of the auditor is to “design and perform audit procedures in such a way as to enable the auditor to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor’s opinion.”

Required:

a. List and explain the factors which will influence the auditors’ judgment concerning the sufficiency of audit evidence obtained. (4 Marks)

b. You are the audit senior in charge of the audit of Radcliffe Co, a company that has been trading for over 50 years. Radcliffe Co manufactures and sells tables and chairs directly to the public. The company’s year-end is 31 December. Current liabilities are shown on Radcliffe Co’s statement of financial position as follows:

Description	2013	2012
Trade payables	884,824	816,817
Accruals	56,903	51,551
Provision for legal action	60,000	–
Total	1,001,727	868,368

The provision for legal action relates to a claim from a customer who suffered an injury while assembling a chair supplied by Radcliffe Co. The directors of Radcliffe Co dispute the claim, although they are recommending an out-of-court settlement to avoid damaging publicity.

List the substantive audit procedures that you should undertake in the audit of the current liabilities of Radcliffe Co for the year ended 31 December 2013. For each procedure, explain the purpose.

Marks are allocated as follows:

Trade payables (9 Marks)
Accruals (3 Marks)
The provision for legal action (4 Marks)

Answer

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Tags: Audit evidence, Audit Judgment, Current Liabilities, ISA 500, Substantive Procedures
Level: Level 2

Topic: Audit evidence

AA – Nov 2015 – L2 – Q2 – Audit Evidence

Explaining the concept of audit evidence, its importance, and describing its sources and attributes.

Question

a. The objective of an audit is for the auditor to express an opinion on the truth and fairness of the financial statements. In the performance of his duty, the auditor seeks to obtain acceptable evidence necessary for him to draw conclusions in order to express a valid opinion on the financial statements.
Required:
i. Describe audit evidence and justify why the auditor would require such evidence. (4 Marks)

b. Identify FOUR sources of audit evidence and illustrate how these sources would affect the auditor’s reliance on the evidence. (10 Marks)

c. Describe THREE attributes of audit evidence. (6 Marks)

Answer

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Tags: Audit evidence, Audit Judgment, Audit Process, Reliability of Evidence, Sources of Evidence
Level: Level 2

Topic: Audit evidence
Series: NOV 2015

AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence

Explains factors that influence the sufficiency of audit evidence obtained during an audit.

Question

Sophie & Co., a firm of Chartered Accountants, is preparing the end-of-year audit for GH Mobile, a client that is listed on the Ghana Stock Exchange. You have been selected to be part of the team to audit the non-current assets of GH Mobile. As an audit associate, you were provided with evidence that you have assessed as not sufficient. Also, you have raised issues regarding the omission of important items in the management representation letter of the client.

Required:
Explain FIVE (5) factors that will influence the auditor’s judgement regarding the sufficiency of the evidence obtained.

Answer

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Tags: Audit evidence, Audit Judgment, Risk Assessment, Sufficiency of audit evidence
Level: Level 2

Topic: Audit and Assurance Evidence
Series: AUG 2022

AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability

Discuss the concept of professional skepticism and its importance, and assess areas where high levels of skepticism are needed in an audit.

Question

You are the audit manager in charge of the audit of Vulnerable Company Limited, which has been making losses in its operations owing to many factors including competition, impairment of some of its non-current assets, and losses incurred on derivatives in its hedging activities as well as problems of complying with many laws and regulations governing its operations.

During your briefing meeting with the Engagement Partner, he drew your attention to the Question and Answer paper on Professional Skepticism issued by the International Auditing and Assurance Standards Board (IAASB) and requested you to discuss its contents with the audit team before commencement of the field work.

Required:

i) Discuss the concept of Professional Skepticism and its importance in audit. (4 marks)

ii) Assess and evaluate the areas in an audit of your client where the audit team members need to exercise a high level of professional skepticism.

(6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Judgment, Professional Skepticism, Risk Assessment
Level: Level 3

Topic: Professional responsibility and liability, The audit approach
Series: NOV 2017

AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing

Examining professional skepticism, its necessity across audit stages, and its application in audits.

Question

Required:

a. Explain the term “Professional Scepticism.” (3 Marks)

b. Identify the stages in the audit process where professional scepticism is necessary. (3 Marks)

c. Discuss three ways in which the application of professional scepticism can be demonstrated by the auditor. (9 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Judgment, Audit Process, Fair Value, Going Concern, Professional scepticism, Related Party Transactions
Level: Level 3

Topic: Ethical Issues in Auditing

AA – Nov 2014 – L2 – Q2 – Audit Evidence

Discuss factors affecting sufficiency of audit evidence and audit procedures for current liabilities in Radcliffe Co.

Question

Radcliffe Co.

Required:

a. List and explain the factors which will influence the auditors’ judgment concerning the sufficiency of audit evidence obtained. (4 Marks)

Description	2013	2012
Trade payables	884,824	816,817
Accruals	56,903	51,551
Provision for legal action	60,000	–
Total	1,001,727	868,368

List the substantive audit procedures that you should undertake in the audit of the current liabilities of Radcliffe Co for the year ended 31 December 2013. For each procedure, explain the purpose.

Marks are allocated as follows:

Trade payables (9 Marks)
Accruals (3 Marks)
The provision for legal action (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Judgment, Current Liabilities, ISA 500, Substantive Procedures
Level: Level 2

Topic: Audit evidence

AA – Nov 2015 – L2 – Q2 – Audit Evidence

Explaining the concept of audit evidence, its importance, and describing its sources and attributes.

Question

b. Identify FOUR sources of audit evidence and illustrate how these sources would affect the auditor’s reliance on the evidence. (10 Marks)

c. Describe THREE attributes of audit evidence. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Judgment, Audit Process, Reliability of Evidence, Sources of Evidence
Level: Level 2

Topic: Audit evidence
Series: NOV 2015

AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence

Explains factors that influence the sufficiency of audit evidence obtained during an audit.

Question

Required:
Explain FIVE (5) factors that will influence the auditor’s judgement regarding the sufficiency of the evidence obtained.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Judgment, Risk Assessment, Sufficiency of audit evidence
Level: Level 2

Topic: Audit and Assurance Evidence
Series: AUG 2022

AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability

Discuss the concept of professional skepticism and its importance, and assess areas where high levels of skepticism are needed in an audit.

Question

Required:

i) Discuss the concept of Professional Skepticism and its importance in audit. (4 marks)

ii) Assess and evaluate the areas in an audit of your client where the audit team members need to exercise a high level of professional skepticism.

(6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Judgment, Professional Skepticism, Risk Assessment
Level: Level 3

Topic: Professional responsibility and liability, The audit approach
Series: NOV 2017

Question Tag: Audit Judgment

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AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing

Examining professional skepticism, its necessity across audit stages, and its application in audits.

AA – Nov 2014 – L2 – Q2 – Audit Evidence

Discuss factors affecting sufficiency of audit evidence and audit procedures for current liabilities in Radcliffe Co.

AA – Nov 2015 – L2 – Q2 – Audit Evidence

Explaining the concept of audit evidence, its importance, and describing its sources and attributes.

AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence

Explains factors that influence the sufficiency of audit evidence obtained during an audit.

AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability

Discuss the concept of professional skepticism and its importance, and assess areas where high levels of skepticism are needed in an audit.

AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing

Examining professional skepticism, its necessity across audit stages, and its application in audits.

AA – Nov 2014 – L2 – Q2 – Audit Evidence

Discuss factors affecting sufficiency of audit evidence and audit procedures for current liabilities in Radcliffe Co.

AA – Nov 2015 – L2 – Q2 – Audit Evidence

Explaining the concept of audit evidence, its importance, and describing its sources and attributes.

AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence

Explains factors that influence the sufficiency of audit evidence obtained during an audit.

AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability

Discuss the concept of professional skepticism and its importance, and assess areas where high levels of skepticism are needed in an audit.

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AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing

Examining professional skepticism, its necessity across audit stages, and its application in audits.

You're reporting an error for "AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing"

AA – Nov 2014 – L2 – Q2 – Audit Evidence

Discuss factors affecting sufficiency of audit evidence and audit procedures for current liabilities in Radcliffe Co.

You're reporting an error for "AA – Nov 2014 – L2 – Q2 – Audit Evidence"

AA – Nov 2015 – L2 – Q2 – Audit Evidence

Explaining the concept of audit evidence, its importance, and describing its sources and attributes.

You're reporting an error for "AA – Nov 2015 – L2 – Q2 – Audit Evidence"

AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence

Explains factors that influence the sufficiency of audit evidence obtained during an audit.

You're reporting an error for "AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence"

AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability

Discuss the concept of professional skepticism and its importance, and assess areas where high levels of skepticism are needed in an audit.

You're reporting an error for "AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability"

AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing

Examining professional skepticism, its necessity across audit stages, and its application in audits.

You're reporting an error for "AAA – Nov 2018 – L3 – Q5 – Ethical Issues in Auditing"

AA – Nov 2014 – L2 – Q2 – Audit Evidence

Discuss factors affecting sufficiency of audit evidence and audit procedures for current liabilities in Radcliffe Co.

You're reporting an error for "AA – Nov 2014 – L2 – Q2 – Audit Evidence"

AA – Nov 2015 – L2 – Q2 – Audit Evidence

Explaining the concept of audit evidence, its importance, and describing its sources and attributes.

You're reporting an error for "AA – Nov 2015 – L2 – Q2 – Audit Evidence"

AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence

Explains factors that influence the sufficiency of audit evidence obtained during an audit.

You're reporting an error for "AA – Aug 2022 – L2 – Q3a – Audit and Assurance Evidence"

AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability

Discuss the concept of professional skepticism and its importance, and assess areas where high levels of skepticism are needed in an audit.

You're reporting an error for "AAA – Nov 2017 – L3 – Q3b – The Audit Approach, Professional Responsibility and Liability"

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