Question Tag: Audit Standards

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AAA – Nov 2013 – L3 – A – Q17 – Auditor’s Legal Liability

This question examines the best defence an audit firm can present when accused of failing to identify substandard and obsolete inventory.

Question

Yakubu Chukwu & Co was sued by one of its clients who alleged that the firm failed to satisfy the auditing standards in identifying substandard and obsolete inventory while attending end-of-year stock take. Which of the following is the firm’s best defence?
A. It is quite impossible to expect the firm to identify substandard and obsolete inventory due to the special nature of the inventory
B. Yakubu Chukwu & Co has to prove that its audit has been carried out with reasonable skill, care, and diligence
C. Auditing standards are not legislated, therefore, the client has no right to sue the firm
D. The contributory negligence of the client
E. Identification of substandard and obsolete stock requires an expert opinion

Answer

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Tags: Audit Standards, Auditor Liability, Defence, Obsolete Inventory
Level: Level 3

Topic: Auditor’s Legal Liability
Series: NOV 2012

AAA – Nov 2013 – L3 – A – Q14 – Regulatory Framework and Professional Standards

This question assesses knowledge of factors that weaken local auditing standards and identifies an unrelated factor.

Question

Factors that contribute to the weaknesses of local auditing standards include the following EXCEPT:
A. Standard setters being subject to political pressures
B. Having inadequate resources
C. Being insufficiently timed in response to market needs
D. Loss of investment by stakeholders
E. Having sources of fund which raise questions about their independence

Answer

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Tags: Audit Standards, Independence, Local Auditing Standards, Regulatory Framework
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

AAA – Nov 2012 – L3 – AII – Q4 – Regulatory Framework and Professional Standards

Identifies the regulatory authority with which companies must file audited financial statements.

Question

The audited financial statements of every company must be filed with the ……………………

Answer

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Tags: Audit Standards, Corporate Governance, Filing Requirements, Financial Statements, Regulatory Compliance
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

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 2012 – L3 – SA – Q14 – Regulatory Framework and Professional Standards

Determining criteria for immaterial information based on ISA 320.

Question

According to ISA 320, the auditor is expected to treat information as IMMATERIAL if:

A. Its omission could influence the economic decision of users based on the financial statement
B. Its misstatement could alter the decision of stakeholders based on the financial statements
C. Its omission is within the audit objective
D. Its misstatement will make an audit objective to be defeated
E. Its omission threatens the going concern of the organisation

Answer

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Tags: Audit Standards, Financial Statements, Immaterial Information, ISA 320, Materiality
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

AAA – Nov 2011 – L3 – SA – Q15 – Quality Control in Audit Firms

Identifies an action that does not contribute to quality control in audits by professional bodies.

Question

Quality control in audit is maintained by professional accountancy bodies through all the following EXCEPT:

A. Publishing of auditing standards
B. Publishing of accounting standards
C. Encouraging members to be computer literate
D. Publishing code of conduct for members
E. Establishment of public practice sector

Answer

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Tags: Audit Standards, Professional Conduct, Public Practice, Quality control
Level: Level 3

Topic: Quality Control in Audit Firms
Series: NOV 2011

AAA – May 2024 – L3 – SC – Q6 – Quality Control in Audit Firms

Outline the impacts of poor quality audit services and engagement partner responsibilities under ISA 220.

Question

The partners of a number of small firms, some of whom act as alternate firms to each other, were considering the outcome of some reviews by the Financial Reporting Council on some of the financial statements the firms prepared. These reviews showed significant lapses in the works they carried out and compliance failure of some appropriate standards. Some other practitioners among them also raised concerns about their failure to meet most of the monitoring guidelines issued by the Professional Practice Monitoring Committee of the Institute. Based on these, it has become imperative that something has to be done urgently to save them from further sanctions and possible litigations.

The partners of these small firms have consulted, sought, and obtained approval of your firm to train them on the requirements of relevant regulatory bodies as part of your firm’s contribution to the accountancy profession in general and in recognition of your firm as one of the reputable big firms. Your partner has directed that you prepare and make a presentation to help improve their service delivery standards.

Required:

Prepare an outline for a paper that will be used to address these practitioners on the following:

a. The consequences and actions that could arise as a result of poor quality professional service delivery.

(3 Marks)

b. The responsibilities of “key quality control matters” placed on the engagement partner in accordance with ISA 220-Quality Control for an Audit of Financial Statements. (12 Marks)

(Total 15 Marks)

Answer

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Tags: Audit Standards, ISA 220, Professional Compliance, Professional Practice Monitoring Committee, Quality control, Regulatory Sanctions
Level: Level 3

Topic: Quality Control in Audit Firms
Series: MAY 2024

AAA – Nov 2023 – L3 – SC – Q5 – Audit of IT Systems and Data Analytics

Discusses COBIT's purposes, components, and its application in business processes for IT governance and audit functions.

Question

Hillary Professional Services is a medium-sized firm on a retreat having successfully combined business operations to take advantage of mandatory audit rotation guidelines. At the retreat, it was agreed that a robust software to reduce paperwork was inevitable. All along, one of the combined firms has an Information Technology (IT) Unit which has been strengthened with state-of-the-art equipment.

All auditors are now encouraged to show more interest in information technology, especially in areas relating to data analytics, artificial intelligence, and machine learning. Undoubtedly, understanding the business information system used by management is necessary as they affect risk assessment involved in the financial reporting process. It was also concluded that obtaining an understanding of the field of information technology is a standard audit procedure to be followed; otherwise, it will be difficult to evaluate the adequacy of the expert’s work as recommended by International Standards on Auditing. The purpose of the merger will be defeated if the firm will not be able to win jobs and perform well in a highly competitive market. The after-effect of the COVID-19 pandemic has also revealed that one could work with flexibility anywhere if there is a robust audit software in place.

The IT Audit Partner made a presentation on “COBIT (Control Objectives for Information and Related Technologies) – a globally accepted suite of tools that a client might use in order to ensure IT is working effectively.” He stated that COBIT is all about doing the right things the right way in order to deliver benefits to the client.

You are a staff of Hillary Professional Services. Based on the presentation made on COBIT at the retreat, you have been divided into groups and the groups are to debrief the main group after one hour.

Required:

a. State the purposes of COBIT (Control Objectives for Information and Related Technologies).
(3 Marks)

b. Identify and explain the specific components of COBIT.
(8 Marks)

c. Explain how COBIT will be applied in the business process.
(4 Marks)

Total: 15 Marks

Answer

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Tags: Audit Procedure, Audit Standards, COBIT, Data Analytics, Digital Transformation, Financial Reporting, Information Systems, IT Governance, Machine Learning
Level: Level 3

Topic: Audit of IT Systems and Data Analytics
Series: NOV 2023

AA – Nov 2021 – L2 – Q1b – Audit Reports

List the minimum elements required in an auditor's report according to ISA 700.

Question

The auditor’s report is regulated by either the law (CAMA 2020) or regulation (ISA 700).
i. State the minimum elements of the auditor’s report as required by ISA 700. (10 Marks)
ii. Explain briefly the matters to be expressly stated in the report of the auditors of a company to its members on the accounts examined by them as stated in CAMA 2020. (10 Marks)

Answer

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Tags: Audit Standards, Auditor's Report, CAMA 2020, ISA 700
Level: Level 2

Topic: Audit Reports
Series: NOV 2021

AA – May 2016 – L2 – Q3d – Audit and Assurance Evidence

This question discusses the criteria that external auditors should consider when deciding whether to place reliance on the work performed by internal auditors.

Question

(d) ISA 610 using the work of internal auditors provides guidance to external auditors on the use of internal audit work.

Required:
List and explain the various criteria that should be considered by external auditors when assessing whether to take reliance from work performed by internal audit.

(4 marks)

Answer

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Tags: Audit evidence, Audit Standards, External audit, Internal Audit, Reliance on Audit Work
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

AAA – Nov 2013 – L3 – A – Q17 – Auditor’s Legal Liability

This question examines the best defence an audit firm can present when accused of failing to identify substandard and obsolete inventory.

Question

Answer

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Tags: Audit Standards, Auditor Liability, Defence, Obsolete Inventory
Level: Level 3

Topic: Auditor’s Legal Liability
Series: NOV 2012

AAA – Nov 2013 – L3 – A – Q14 – Regulatory Framework and Professional Standards

This question assesses knowledge of factors that weaken local auditing standards and identifies an unrelated factor.

Question

Answer

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Tags: Audit Standards, Independence, Local Auditing Standards, Regulatory Framework
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

AAA – Nov 2012 – L3 – AII – Q4 – Regulatory Framework and Professional Standards

Identifies the regulatory authority with which companies must file audited financial statements.

Question

The audited financial statements of every company must be filed with the ……………………

Answer

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Tags: Audit Standards, Corporate Governance, Filing Requirements, Financial Statements, Regulatory Compliance
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

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

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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 2012 – L3 – SA – Q14 – Regulatory Framework and Professional Standards

Determining criteria for immaterial information based on ISA 320.

Question

According to ISA 320, the auditor is expected to treat information as IMMATERIAL if:

Answer

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Tags: Audit Standards, Financial Statements, Immaterial Information, ISA 320, Materiality
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

AAA – Nov 2011 – L3 – SA – Q15 – Quality Control in Audit Firms

Identifies an action that does not contribute to quality control in audits by professional bodies.

Question

Quality control in audit is maintained by professional accountancy bodies through all the following EXCEPT:

A. Publishing of auditing standards
B. Publishing of accounting standards
C. Encouraging members to be computer literate
D. Publishing code of conduct for members
E. Establishment of public practice sector

Answer

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Tags: Audit Standards, Professional Conduct, Public Practice, Quality control
Level: Level 3

Topic: Quality Control in Audit Firms
Series: NOV 2011

AAA – May 2024 – L3 – SC – Q6 – Quality Control in Audit Firms

Outline the impacts of poor quality audit services and engagement partner responsibilities under ISA 220.

Question

Required:

Prepare an outline for a paper that will be used to address these practitioners on the following:

a. The consequences and actions that could arise as a result of poor quality professional service delivery.

(3 Marks)

b. The responsibilities of “key quality control matters” placed on the engagement partner in accordance with ISA 220-Quality Control for an Audit of Financial Statements. (12 Marks)

(Total 15 Marks)

Answer

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Tags: Audit Standards, ISA 220, Professional Compliance, Professional Practice Monitoring Committee, Quality control, Regulatory Sanctions
Level: Level 3

Topic: Quality Control in Audit Firms
Series: MAY 2024

AAA – Nov 2023 – L3 – SC – Q5 – Audit of IT Systems and Data Analytics

Discusses COBIT's purposes, components, and its application in business processes for IT governance and audit functions.

Question

Required:

a. State the purposes of COBIT (Control Objectives for Information and Related Technologies).
(3 Marks)

b. Identify and explain the specific components of COBIT.
(8 Marks)

c. Explain how COBIT will be applied in the business process.
(4 Marks)

Total: 15 Marks

Answer

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Tags: Audit Procedure, Audit Standards, COBIT, Data Analytics, Digital Transformation, Financial Reporting, Information Systems, IT Governance, Machine Learning
Level: Level 3

Topic: Audit of IT Systems and Data Analytics
Series: NOV 2023

AA – Nov 2021 – L2 – Q1b – Audit Reports

List the minimum elements required in an auditor's report according to ISA 700.

Question

Answer

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Tags: Audit Standards, Auditor's Report, CAMA 2020, ISA 700
Level: Level 2

Topic: Audit Reports
Series: NOV 2021

AA – May 2016 – L2 – Q3d – Audit and Assurance Evidence

This question discusses the criteria that external auditors should consider when deciding whether to place reliance on the work performed by internal auditors.

Question

(d) ISA 610 using the work of internal auditors provides guidance to external auditors on the use of internal audit work.

Required:
List and explain the various criteria that should be considered by external auditors when assessing whether to take reliance from work performed by internal audit.

(4 marks)

Answer

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Tags: Audit evidence, Audit Standards, External audit, Internal Audit, Reliance on Audit Work
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

Question Tag: Audit Standards

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AAA – Nov 2013 – L3 – A – Q17 – Auditor’s Legal Liability

This question examines the best defence an audit firm can present when accused of failing to identify substandard and obsolete inventory.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q17 – Auditor’s Legal Liability"

AAA – Nov 2013 – L3 – A – Q14 – Regulatory Framework and Professional Standards

This question assesses knowledge of factors that weaken local auditing standards and identifies an unrelated factor.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q14 – Regulatory Framework and Professional Standards"

AAA – Nov 2012 – L3 – AII – Q4 – Regulatory Framework and Professional Standards

Identifies the regulatory authority with which companies must file audited financial statements.

You're reporting an error for "AAA – Nov 2012 – L3 – AII – Q4 – Regulatory Framework and Professional Standards"

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 2012 – L3 – SA – Q14 – Regulatory Framework and Professional Standards

Determining criteria for immaterial information based on ISA 320.

You're reporting an error for "AAA – Nov 2012 – L3 – SA – Q14 – Regulatory Framework and Professional Standards"

AAA – Nov 2011 – L3 – SA – Q15 – Quality Control in Audit Firms

Identifies an action that does not contribute to quality control in audits by professional bodies.

You're reporting an error for "AAA – Nov 2011 – L3 – SA – Q15 – Quality Control in Audit Firms"

AAA – May 2024 – L3 – SC – Q6 – Quality Control in Audit Firms

Outline the impacts of poor quality audit services and engagement partner responsibilities under ISA 220.

You're reporting an error for "AAA – May 2024 – L3 – SC – Q6 – Quality Control in Audit Firms"

AAA – Nov 2023 – L3 – SC – Q5 – Audit of IT Systems and Data Analytics

Discusses COBIT's purposes, components, and its application in business processes for IT governance and audit functions.

You're reporting an error for "AAA – Nov 2023 – L3 – SC – Q5 – Audit of IT Systems and Data Analytics"

AA – Nov 2021 – L2 – Q1b – Audit Reports

List the minimum elements required in an auditor's report according to ISA 700.

You're reporting an error for "AA – Nov 2021 – L2 – Q1b – Audit Reports"

AA – May 2016 – L2 – Q3d – Audit and Assurance Evidence

This question discusses the criteria that external auditors should consider when deciding whether to place reliance on the work performed by internal auditors.

You're reporting an error for "AA – May 2016 – L2 – Q3d – Audit and Assurance Evidence"

AAA – Nov 2013 – L3 – A – Q17 – Auditor’s Legal Liability

This question examines the best defence an audit firm can present when accused of failing to identify substandard and obsolete inventory.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q17 – Auditor’s Legal Liability"

AAA – Nov 2013 – L3 – A – Q14 – Regulatory Framework and Professional Standards

This question assesses knowledge of factors that weaken local auditing standards and identifies an unrelated factor.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q14 – Regulatory Framework and Professional Standards"

AAA – Nov 2012 – L3 – AII – Q4 – Regulatory Framework and Professional Standards

Identifies the regulatory authority with which companies must file audited financial statements.

You're reporting an error for "AAA – Nov 2012 – L3 – AII – Q4 – Regulatory Framework and Professional Standards"

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 2012 – L3 – SA – Q14 – Regulatory Framework and Professional Standards

Determining criteria for immaterial information based on ISA 320.

You're reporting an error for "AAA – Nov 2012 – L3 – SA – Q14 – Regulatory Framework and Professional Standards"

AAA – Nov 2011 – L3 – SA – Q15 – Quality Control in Audit Firms

Identifies an action that does not contribute to quality control in audits by professional bodies.

You're reporting an error for "AAA – Nov 2011 – L3 – SA – Q15 – Quality Control in Audit Firms"

AAA – May 2024 – L3 – SC – Q6 – Quality Control in Audit Firms

Outline the impacts of poor quality audit services and engagement partner responsibilities under ISA 220.

You're reporting an error for "AAA – May 2024 – L3 – SC – Q6 – Quality Control in Audit Firms"

AAA – Nov 2023 – L3 – SC – Q5 – Audit of IT Systems and Data Analytics

Discusses COBIT's purposes, components, and its application in business processes for IT governance and audit functions.

You're reporting an error for "AAA – Nov 2023 – L3 – SC – Q5 – Audit of IT Systems and Data Analytics"

AA – Nov 2021 – L2 – Q1b – Audit Reports

List the minimum elements required in an auditor's report according to ISA 700.

You're reporting an error for "AA – Nov 2021 – L2 – Q1b – Audit Reports"

AA – May 2016 – L2 – Q3d – Audit and Assurance Evidence

This question discusses the criteria that external auditors should consider when deciding whether to place reliance on the work performed by internal auditors.

You're reporting an error for "AA – May 2016 – L2 – Q3d – Audit and Assurance Evidence"

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