Audit Requirements – NBC Institute

AAA – May 2017 – L3 – Q5 – Audit Reporting

Explain the IAASB Clarity Project's objective and describe new requirements in various revised ISAs.

Question

You are an Audit Manager of Lobito James & Co., a firm of Chartered Accountants. You are aware of some significant changes and new requirements in the Revised ISAs as a result of the IAASB Clarity Project issued in October 2008 that are expected to impact the following audit procedures:

(a) Communicating with those charged with governance (ISA 260).
(b) Materiality in planning and performing an audit (ISA 320).
(c) Audit considerations relating to an entity using a service organisation (ISA 402).
(d) Evaluation of misstatements identified during an audit (ISA 450).
(e) External confirmation (ISA 505).
(f) Auditing accounting estimates, including fair value, accounting estimates and related disclosures (ISA 540).
(g) Related parties (ISA 550).

You are required to:

i. Explain the objective of the IAASB Clarity Project. (1 Mark)

ii. Explain TWO new requirements in each of the revised ISAs listed above. (14 Marks)

Answer

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Tags: Audit Requirements, Audit Standards, Auditing Procedures, IAASB Clarity Project, ISAs
Level: Level 3

Topic: Audit Reporting

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

Question

Mr. Ajibade, a businessman based in the South West region of Nigeria intends to start a new company. The new company, when formed, will focus solely on the production of face masks and alcohol-based hand sanitisers which are needed to prevent the spread of the novel corona virus. This has been incorporated into the draft Memorandum of Association to be submitted to the Corporate Affairs Commission (CAC).

Mr. Ajibade has heard of section 377 of Companies and Allied Matters Act (CAMA) Cap C20 LFN 2004, which offers exemption from an audit if a company qualifies as a small company as per section 351 of the Act. He thinks that when he starts a small company, he will therefore be exempted from statutory audit and so save cost.

Mr. Ajibade has a growth plan for his prospective company. He has also heard that if the company is to grow bigger in the future, he will require more funding in the form of loans from banks and other financial institutions. The banks will require audited financial statements as a prerequisite to granting his company loan facilities. He is therefore, curious to know more about the importance of audited financial statements.
He has approached you for advice.

Required:
a. What qualifies a company as a small company according to CAMA.
(6 Marks)
b. The benefits and limitations of an audit.
(9 Marks)
c. The eligibility for qualification as external auditor.
(6 Marks)
d. The scope of a statutory audit.
(4 Marks)
e. According to ISA 300: Planning an Audit of Financial Statements, the objective of the auditor is to plan the audit work so that the audit will be performed in an effective manner.
Required:
Explain the benefits of adequate planning of the audit.
(5 Marks)
f. Explain THREE risk assessment procedures required by ISA 315: Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment.
(10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Benefits, Audit Exemptions, Audit Requirements, Professional Ethics, Risk Assessment Procedures, Small Companies
Level: Level 2

AAA – May 2017 – L3 – Q5 – Audit Reporting

Explain the IAASB Clarity Project's objective and describe new requirements in various revised ISAs.

Question

You are required to:

i. Explain the objective of the IAASB Clarity Project. (1 Mark)

ii. Explain TWO new requirements in each of the revised ISAs listed above. (14 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Requirements, Audit Standards, Auditing Procedures, IAASB Clarity Project, ISAs
Level: Level 3

Topic: Audit Reporting

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Benefits, Audit Exemptions, Audit Requirements, Professional Ethics, Risk Assessment Procedures, Small Companies
Level: Level 2

Question Tag: Audit Requirements

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AAA – May 2017 – L3 – Q5 – Audit Reporting

Explain the IAASB Clarity Project's objective and describe new requirements in various revised ISAs.

You are required to:

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

AAA – May 2017 – L3 – Q5 – Audit Reporting

Explain the IAASB Clarity Project's objective and describe new requirements in various revised ISAs.

You are required to:

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

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AAA – May 2017 – L3 – Q5 – Audit Reporting

Explain the IAASB Clarity Project's objective and describe new requirements in various revised ISAs.

You are required to:

You're reporting an error for "AAA – May 2017 – L3 – Q5 – Audit Reporting"

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

You're reporting an error for "AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification"

AAA – May 2017 – L3 – Q5 – Audit Reporting

Explain the IAASB Clarity Project's objective and describe new requirements in various revised ISAs.

You are required to:

You're reporting an error for "AAA – May 2017 – L3 – Q5 – Audit Reporting"

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

You're reporting an error for "AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification"

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