Question Tag: Audit Objectives

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AAA – May 2022 – L3 – Q6 – Ethical Issues in Auditing

Prepare a manual on external auditor eligibility and discuss auditor objectives under ISA 200.

Question

The accountancy profession earns confidence and public respect partly as a result of its self-regulatory mechanism, application of legal principles, and professional standards.

This issue became a subject of discussion when a group of business owners who just incorporated their companies were deliberating on who should carry out an audit and what are the guiding principles for determining the performance of such responsibility.

Required:

a. Prepare a manual to enable the discussants to understand this professional member’s eligibility to act as an external auditor. (9 Marks)

b. Discuss the objectives of an auditor in accordance with ISA 200: Overall objectives of the independent auditor and the conduct of an auditor in accordance with International Standards on Auditing. (6 Marks)

Answer

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Tags: Audit Guidance, Audit Objectives, Auditor Eligibility, ISA 200, Professional Standards
Level: Level 3

AAA – Nov 2016 – L3 – Q7 – Audit Completion and Final Review

Outline auditor objectives and audit procedures for opening balances in an initial audit engagement under ISA 510.

Question

Iyanuoluwa Pharmaceutical Industries Limited has been in existence for some years and it has been audited by a firm of Chartered Accountants up to December 31, 2014.

Your firm, Blueberry & Co. (Chartered Accountants), has just been appointed to act as auditors for the financial year January 1, 2015, to December 31, 2015, which has been accepted.

Required:
In line with ISA 510: “Initial Audit Engagements”:

a. What are the objectives of the Auditor when considering such an initial audit engagement in respect of opening balances? (6 Marks)
b. Provide audit procedures that are required to be followed in respect of opening balances. (9 Marks)

Answer

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Tags: Audit Objectives, Audit Procedures, Initial Engagement, ISA 510, Opening Balances
Level: Level 3

Topic: Audit Completion and Final Review

AAA – Nov 2012 – L3 – SA – Q19 – Quality Control in Audit Firms

Identifying the primary objective of conducting an audit review.

Question

Which of the following is the most appropriate objective of audit review?

A. Frauds and errors do not occur in an audit engagement
B. The audit is completed early for the report to be used
C. The audit is performed with the highest standard of quality
D. To ensure that appropriate bill is sent to the client
E. No dispute arises between the firm and the client

Answer

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Tags: Audit Objectives, Audit Review, Audit Standards, Quality control
Level: Level 3

Topic: Quality Control in Audit Firms
Series: NOV 2012

AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

Question

Eat Well Bakeries is a private limited liability company. It bakes bread and other confectioneries, produced from the main bakery and a smaller bakery in another part of town. Products are sold from these two bakeries and five additional outlets in the same town. Distributors purchase products outright and bear the risk of sale.

The main administrative and management functions of the bakeries are conducted from the main bakery, while basic records are kept at the small bakery and sales outlets. These records are transmitted to the main office every morning. Detailed accounting records and performance analysis are handled in the main administrative office.

Despite being a private business, the chairman insists on maintaining proper standards to stay competitive. The chairman transferred the company’s audit to your firm after a discussion with your partner, and professional clearance was obtained. However, limited documentation from the predecessor auditor was available, and no extensive documentation was done at the beginning of the audit.

You have been assigned to continue the audit from where it was left off, ensuring the chairman’s expectations are met.

Required:

a. Evaluate the Auditor’s objective concerning ISA 250 that would be discussed with the chairman. (5 Marks)

b. Prepare an outline of matters that should be communicated. (5 Marks)

c. Your review shows internal control challenges. Based on this, prepare a brief on:

i. The meaning of deficiency as per ISA 265 (3 Marks)
ii. The components to be included in communication to the chairman regarding deficiencies (5 Marks)

d. Evaluate potential audit strategies, and recommend an appropriate model for application to Eat Well Bakeries. (12 Marks)

Answer

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Tags: Audit Objectives, Audit strategy, Communication with Governance, Deficiency Reporting, Internal Control, ISA 250, ISA 265, Risk Assessment
Level: Level 3

Topic: Overview of Advanced Audit and Assurance

AA – Nov 2022 – L2 – Q1 – Audit Opinion and Standards

Explores the auditor's opinion, ISA 200 objectives, audit scope, and regulatory roles in auditing standards compliance.

Question

In an accountancy class on “Audit Opinion in International Standards on Auditing”, Ado, a lecturer at ICAN University, was explaining to the students that the end product of external audit work is the auditor‟s opinion expressed on the financial statements. He stated that a general purpose financial statement was in compliance with the financial reporting framework designed to meet the common financial information needs of a wide variety of users.

The role of audit is to provide a high level of assurance to the users of the financial statements and that it is necessary for users to have confidence that consistent auditing standards have been applied to the audits of financial statements of companies. He went further to explain that the overall objectives of the independent auditor is to ensure that the conduct of an audit is in accordance with International Standards on Auditing. He concluded that the auditor‟s report shall include a section with the heading “Opinion” as stated below
Opinion
We have audited the financial statements of Inajit Plc set out on pages XXX to XXXX which comprise the statement of financial position as at year end date, and the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, the notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements give a true and fair view of financial position of Inajit Plc as at year end date, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies and Allied Matters Act 2020 and Financial Reporting Council Act,2011. At the end of the lecture a student in the class came to you for further explanation on the topic.
Required:
a. State the objectives of the independent auditor as stated in International Standards on Auditing. (5 Marks)
b. Outline what ISA 200 requires the auditor to do in relation to the audit of financial statements. (10 Marks)
c. Explain the scope of audit as described in the independent auditor’s report. (5 Marks)
d. Highlight the role of regulatory bodies in ensuring that audits are carried out in line with standards. (10 Marks)

Answer

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Tags: Audit Objectives, Audit opinion, Financial Statements, ISA Compliance, Regulatory Standards
Level: Level 2

Topic: Audit Reports
Series: NOV 2022

PSAF – Nov 2015 – L2 – Q5a – Public Sector Audit

Outline audit objectives for Treasury, Agency, and Government Enterprise accounts.

Question

The functions of the office of the Auditor-General for the Federation is to audit the accounts of all Accounting Officers and all persons entrusted with the collections, receipts, custody, issue, or payment of Federal Government monies or with the receipt, collection, issue, sale, transfer, or delivery of any stamps, securities, stores, or other property of the Government of the Federation and for the certification of the annual accounts of the Government.

In light of the above, state three audit objectives of:
i. Treasury Accounts.
ii. Agency Accounts.
iii. Government Enterprise Accounts.

Answer

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Tags: Agency Accounts, Asset Security, Audit Objectives, Compliance, Government Enterprise Accounts, Treasury Accounts
Level: Level 2

Topic: Public sector audit
Series: NOV 2015

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

Question

The information in the financial statements of your client, Honesty Company Limited, represents claims by management in relation to its responsibility to prepare financial statements that give a true and fair view of the company’s state of affairs and results of operations for the year under review. These claims are referred to as financial statement assertions.

Required:
a) Outline the audit objectives for the audit of stock (inventories) in the financial statements. Your answer should relate to the financial statement assertions. (8 marks)

b) Discuss FOUR (4) sources from which evidence can be obtained to confirm the quantities and value of stocks. (8 marks)

c) Explain why stocks present high audit risk. (4 marks)

Answer

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Tags: Audit evidence, Audit Objectives, Audit Risk, Financial statement assertions, Inventory
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2019

AA – Nov 2020 – L2 – Q5a – Regulatory Framework and Audit Responsibilities

Explain the purpose of an engagement letter and key information it should contain.

Question

ISA 210: Agreeing the terms of audit engagements requires that auditors should issue a letter of engagement before commencement of the audit.

Required:
i) What is the purpose of an engagement letter?
(1 mark)

ii) Identify FOUR (4) important pieces of information that the engagement letter should contain.
(4 marks)

Answer

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Tags: Audit Objectives, Audit Terms, Engagement letter, ISA 210, Responsibilities

Topic: Regulatory Framework and Audit Responsibilities
Series: NOV 2020

AA – May 2016 – L2 – Q5a – Audit and Assurance Evidence

This question explains the purpose and objectives of a value for money (VFM) audit.

Question

(a) Explain the purpose of value for money audit. (4 marks)

Answer

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Tags: Audit Objectives, Economy, Effectiveness, Efficiency, Value for Money Audit
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

AAA – May 2022 – L3 – Q6 – Ethical Issues in Auditing

Prepare a manual on external auditor eligibility and discuss auditor objectives under ISA 200.

Question

The accountancy profession earns confidence and public respect partly as a result of its self-regulatory mechanism, application of legal principles, and professional standards.

Required:

a. Prepare a manual to enable the discussants to understand this professional member’s eligibility to act as an external auditor. (9 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Guidance, Audit Objectives, Auditor Eligibility, ISA 200, Professional Standards
Level: Level 3

AAA – Nov 2016 – L3 – Q7 – Audit Completion and Final Review

Outline auditor objectives and audit procedures for opening balances in an initial audit engagement under ISA 510.

Question

Iyanuoluwa Pharmaceutical Industries Limited has been in existence for some years and it has been audited by a firm of Chartered Accountants up to December 31, 2014.

Your firm, Blueberry & Co. (Chartered Accountants), has just been appointed to act as auditors for the financial year January 1, 2015, to December 31, 2015, which has been accepted.

Required:
In line with ISA 510: “Initial Audit Engagements”:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Objectives, Audit Procedures, Initial Engagement, ISA 510, Opening Balances
Level: Level 3

Topic: Audit Completion and Final Review

AAA – Nov 2012 – L3 – SA – Q19 – Quality Control in Audit Firms

Identifying the primary objective of conducting an audit review.

Question

Which of the following is the most appropriate objective of audit review?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Objectives, Audit Review, Audit Standards, Quality control
Level: Level 3

Topic: Quality Control in Audit Firms
Series: NOV 2012

AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

Question

You have been assigned to continue the audit from where it was left off, ensuring the chairman’s expectations are met.

Required:

a. Evaluate the Auditor’s objective concerning ISA 250 that would be discussed with the chairman. (5 Marks)

b. Prepare an outline of matters that should be communicated. (5 Marks)

c. Your review shows internal control challenges. Based on this, prepare a brief on:

i. The meaning of deficiency as per ISA 265 (3 Marks)
ii. The components to be included in communication to the chairman regarding deficiencies (5 Marks)

d. Evaluate potential audit strategies, and recommend an appropriate model for application to Eat Well Bakeries. (12 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Objectives, Audit strategy, Communication with Governance, Deficiency Reporting, Internal Control, ISA 250, ISA 265, Risk Assessment
Level: Level 3

Topic: Overview of Advanced Audit and Assurance

AA – Nov 2022 – L2 – Q1 – Audit Opinion and Standards

Explores the auditor's opinion, ISA 200 objectives, audit scope, and regulatory roles in auditing standards compliance.

Question

Answer

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Tags: Audit Objectives, Audit opinion, Financial Statements, ISA Compliance, Regulatory Standards
Level: Level 2

Topic: Audit Reports
Series: NOV 2022

PSAF – Nov 2015 – L2 – Q5a – Public Sector Audit

Outline audit objectives for Treasury, Agency, and Government Enterprise accounts.

Question

In light of the above, state three audit objectives of:
i. Treasury Accounts.
ii. Agency Accounts.
iii. Government Enterprise Accounts.

Answer

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Tags: Agency Accounts, Asset Security, Audit Objectives, Compliance, Government Enterprise Accounts, Treasury Accounts
Level: Level 2

Topic: Public sector audit
Series: NOV 2015

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

Question

Required:
a) Outline the audit objectives for the audit of stock (inventories) in the financial statements. Your answer should relate to the financial statement assertions. (8 marks)

b) Discuss FOUR (4) sources from which evidence can be obtained to confirm the quantities and value of stocks. (8 marks)

c) Explain why stocks present high audit risk. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Audit Objectives, Audit Risk, Financial statement assertions, Inventory
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2019

AA – Nov 2020 – L2 – Q5a – Regulatory Framework and Audit Responsibilities

Explain the purpose of an engagement letter and key information it should contain.

Question

ISA 210: Agreeing the terms of audit engagements requires that auditors should issue a letter of engagement before commencement of the audit.

Required:
i) What is the purpose of an engagement letter?
(1 mark)

ii) Identify FOUR (4) important pieces of information that the engagement letter should contain.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Objectives, Audit Terms, Engagement letter, ISA 210, Responsibilities

Topic: Regulatory Framework and Audit Responsibilities
Series: NOV 2020

AA – May 2016 – L2 – Q5a – Audit and Assurance Evidence

This question explains the purpose and objectives of a value for money (VFM) audit.

Question

(a) Explain the purpose of value for money audit. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Objectives, Economy, Effectiveness, Efficiency, Value for Money Audit
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

Question Tag: Audit Objectives

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AAA – May 2022 – L3 – Q6 – Ethical Issues in Auditing

Prepare a manual on external auditor eligibility and discuss auditor objectives under ISA 200.

You're reporting an error for "AAA – May 2022 – L3 – Q6 – Ethical Issues in Auditing"

AAA – Nov 2016 – L3 – Q7 – Audit Completion and Final Review

Outline auditor objectives and audit procedures for opening balances in an initial audit engagement under ISA 510.

You're reporting an error for "AAA – Nov 2016 – L3 – Q7 – Audit Completion and Final Review"

AAA – Nov 2012 – L3 – SA – Q19 – Quality Control in Audit Firms

Identifying the primary objective of conducting an audit review.

You're reporting an error for "AAA – Nov 2012 – L3 – SA – Q19 – Quality Control in Audit Firms"

AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

You're reporting an error for "AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance"

AA – Nov 2022 – L2 – Q1 – Audit Opinion and Standards

Explores the auditor's opinion, ISA 200 objectives, audit scope, and regulatory roles in auditing standards compliance.

You're reporting an error for "AA – Nov 2022 – L2 – Q1 – Audit Opinion and Standards"

PSAF – Nov 2015 – L2 – Q5a – Public Sector Audit

Outline audit objectives for Treasury, Agency, and Government Enterprise accounts.

You're reporting an error for "PSAF – Nov 2015 – L2 – Q5a – Public Sector Audit"

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

You're reporting an error for "AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence"

AA – Nov 2020 – L2 – Q5a – Regulatory Framework and Audit Responsibilities

Explain the purpose of an engagement letter and key information it should contain.

You're reporting an error for "AA – Nov 2020 – L2 – Q5a – Regulatory Framework and Audit Responsibilities"

AA – May 2016 – L2 – Q5a – Audit and Assurance Evidence

This question explains the purpose and objectives of a value for money (VFM) audit.

You're reporting an error for "AA – May 2016 – L2 – Q5a – Audit and Assurance Evidence"

AAA – May 2022 – L3 – Q6 – Ethical Issues in Auditing

Prepare a manual on external auditor eligibility and discuss auditor objectives under ISA 200.

You're reporting an error for "AAA – May 2022 – L3 – Q6 – Ethical Issues in Auditing"

AAA – Nov 2016 – L3 – Q7 – Audit Completion and Final Review

Outline auditor objectives and audit procedures for opening balances in an initial audit engagement under ISA 510.

You're reporting an error for "AAA – Nov 2016 – L3 – Q7 – Audit Completion and Final Review"

AAA – Nov 2012 – L3 – SA – Q19 – Quality Control in Audit Firms

Identifying the primary objective of conducting an audit review.

You're reporting an error for "AAA – Nov 2012 – L3 – SA – Q19 – Quality Control in Audit Firms"

AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

You're reporting an error for "AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance"

AA – Nov 2022 – L2 – Q1 – Audit Opinion and Standards

Explores the auditor's opinion, ISA 200 objectives, audit scope, and regulatory roles in auditing standards compliance.

You're reporting an error for "AA – Nov 2022 – L2 – Q1 – Audit Opinion and Standards"

PSAF – Nov 2015 – L2 – Q5a – Public Sector Audit

Outline audit objectives for Treasury, Agency, and Government Enterprise accounts.

You're reporting an error for "PSAF – Nov 2015 – L2 – Q5a – Public Sector Audit"

AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence

Discusses the audit objectives, sources of evidence for inventory audit, and why stocks present high audit risk.

You're reporting an error for "AA – Nov 2019 – L2 – Q3 – Audit and Assurance Evidence"

AA – Nov 2020 – L2 – Q5a – Regulatory Framework and Audit Responsibilities

Explain the purpose of an engagement letter and key information it should contain.

You're reporting an error for "AA – Nov 2020 – L2 – Q5a – Regulatory Framework and Audit Responsibilities"

AA – May 2016 – L2 – Q5a – Audit and Assurance Evidence

This question explains the purpose and objectives of a value for money (VFM) audit.

You're reporting an error for "AA – May 2016 – L2 – Q5a – Audit and Assurance Evidence"

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