Question Tag: Audit

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AAA – Nov 2013 – L3 – A – Q20 – Audit of Specialized Industries

This question tests knowledge of reserves that may or may not be reviewed during the audit of a non-life insurance company.

Question

Regarding the audit of a non-life insurance company, which of the following reserves may NOT be reviewed?
A. Reserve for unexpired risks
B. Reserve for outstanding claims
C. Contingent reserve
D. External reserve
E. Statutory reserve

Answer

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Tags: Audit, Non-Life Insurance, Reserves, Specialized Industries
Level: Level 3

Topic: Audit of Specialized Industries
Series: NOV 2012

AAA – Nov 2013 – L3 – A – Q6 – Assurance Engagements

This question assesses knowledge of assurance engagements and identifies an activity that is not an assurance engagement.

Question

The following are examples of assurance engagement, EXCEPT
A. Reporting on environmental performance
B. Carrying out statutory audit
C. Reviewing of accounting and internal control system
D. Reporting on statements of accounting policies and goodwill
E. Reviewing of corporate governance within an entity

Answer

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Tags: Assurance Engagement, Audit, Reporting Standards, Review
Level: Level 3

Topic: Assurance Engagements
Series: NOV 2012

AAA – Nov 2013 – L3 – A – Q2 – Audit of IT Systems and Data Analytics

This question assesses the knowledge of internal controls in a computerized accounting system.

Question

In order to understand the internal control system of a computerized accounting system of a client, which of the following computer documentation will assist the auditor the most?
A. System narrative
B. Record layout
C. Programme listing
D. Record counts
E. System flow charts

Answer

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Tags: Audit, Internal Control, IT Systems
Level: Level 3

Topic: Audit of IT Systems and Data Analytics
Series: NOV 2013

AAA – Nov 2013 – L3 – A – Q1 – Audit Reporting

This question tests understanding of considerations for report writing in investigations.

Question

Which of the following may NOT be taken into consideration when writing a report of an investigation?
A. The language of the report must take into consideration the technical knowledge of the users
B. The computation should be detailed in the body of the report
C. The subject-matter of the investigation must be clear from the heading of the report
D. Any reservation should be clearly stated in the body of the report
E. The users of the report must be clearly identifiable

Answer

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Tags: Audit, Investigation, Report Writing, Reporting Standards
Level: Level 3

Topic: Audit Reporting
Series: NOV 2013

AAA – Nov 2012 – L3 – SB – Q5 – Audit of Specialized Industries

This question explores the challenges faced in auditing a teaching hospital and the peculiarities of auditing farm accounts.

Question

You are the audit manager of Kunle Segun & Co (Chartered Accountants) which has been appointed as auditors to St. Anne’s Teaching Hospital and Agrocom Farms Limited.

Required:
a. State FIVE problems associated with the audit of a Teaching Hospital. (10 Marks)

b. List the types of farms and explain the peculiar characteristics associated with the audit of farm accounts. (5 Marks)
(Total 15 Marks)

Answer

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Tags: Agriculture, Audit, Audit Challenges, Farm Accounts, Healthcare, Teaching Hospital
Level: Level 3

Topic: Audit of Specialized Industries
Series: NOV 2012

AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

Question

Your firm, Alheri & Co, has been appointed to carry out an audit assignment on Barders Bank Limited. The Bank’s year ended 30 September 2010. In the process of carrying out this assignment, it was discovered that no provision was made for doubtful debts. Total loans and advances of N50 billion consisting of 200 customers were found to be at various stages of performance except a N1 billion term loan granted to a Director’s relation’s company on 31 December 2009 to be repaid in N100 million monthly equal instalments commencing from 31 January 2010. Interest was simply agreed at N100,000 per month.

As at the time of this audit, no repayment had been made on this loan.

Required:
a. What audit steps should be taken to ascertain the true position of the loan portfolio? (5 Marks)
b. State the basis and determine the provision that should be made on the loan portfolio. (10 Marks)
(Total 15 Marks)

Answer

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Tags: Audit, Doubtful Debts, Financial Reporting, Loans, Provisions
Level: Level 3

Topic: Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)
Series: NOV 2012

AAA – Nov 2012 – L3 – AII – Q16 – Assurance Engagements

Identifies the linkage of responsible parties in assurance engagements to financial statement examination.

Question

To examine financial statements, in Assurance Engagements, “Responsible Parties” are linked to ………………

Answer

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Tags: Assurance engagements, Audit, Financial Statements, Responsible Parties, Stakeholders
Level: Level 3

Topic: Assurance Engagements
Series: NOV 2012

AAA – Nov 2011 – L3 – SAII – Q13 – Audit of Corporate Governance

Source of corporate governance guidelines in Nigeria.

Question

Issues on Corporate Governance in Nigeria are listed in the ……………….

Answer

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Tags: Audit, Corporate Governance, Nigeria, Regulatory Guidelines
Level: Level 3

Topic: Audit of Corporate Governance
Series: NOV 2011

CSME – May 2022 – L2 – SB – Q3 – Environment analysis

Explain the nature, benefits, and key elements of environmental reporting, audits, and Environmental Management Accounting (EMA).

Question

There is a growing concern that organizations should act in a responsible manner to ensure sustainability of their environment. To this end, environmental reporting has become an important part of the reporting obligation of firms. Hence, you have been approached for advice by a manufacturing company that seeks to incorporate environmental reporting into its annual reports. You are to present to the management a report detailing the following:

a. Nature and benefits of environmental reporting. (5 Marks)

i. Key elements of the Sustainability Balanced Scorecard (SBSC) as a measure of a firm’s performance. (2 Marks)
ii. Elements of an environmental audit. (4 Marks)

c. Nature and use of Environmental Management Accounting (EMA). (9 Marks)

Answer

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Tags: Audit, Corporate Social Responsibility, EMA, Environmental Reporting, SBSC
Level: Level 2

Topic: Environment analysis
Series: MAY 2022

PSAF – Nov 2016 – L2 – Q4b – Government Expenditure

This question distinguishes between the Board of Survey and Board of Enquiry, and discusses the conditions for constituting a Board of Enquiry.

Question

i. Distinguish between Board of Survey and Board of Enquiry.
(5 Marks)

ii. Under what conditions would a Board of Enquiry be constituted?
(6 Marks)

Answer

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Tags: Audit, Board of Enquiry, Board of Survey, Public Fund Loss
Level: Level 2

Topic: Government Expenditure
Series: NOV 2016

AA – Nov 2019 – L2 – Q2 – Ethical Issues in Auditing

Discuss the concept of expectation gap in auditing and the reasons an auditor may not detect fraud.

Question

The Financial Reporting Council of Kalagi, when performing a review of the financial statements of Yakoyo Plc., detected some errors and disclosure deficiencies which were brought to the attention of the management of the company. The management put the blame on the company’s auditors and accused them of negligence.

You are a chartered accountant and an informed shareholder of the company. You are required to explain:

a. “Expectation gap” in audit (5 Marks)

b. How the expectation gap can be bridged (7½ Marks)

c. Why an auditor may not detect fraud (7½ Marks)

Answer

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Tags: Audit, Auditor Responsibilities, Expectation Gap, Fraud Detection
Level: Level 2

Topic: Ethical Issues in Auditing
Series: NOV 2019

PSAF – May 2018 – L2 – Q4 – Public Sector Audit

Explain the concept of Value-for-Money audit, its components, steps, and factors contributing to an effective VFM audit.

Question

In relation to public sector audit:

a. Define ‘Value-for-Money’ (VFM) audit. (2½ Marks)

b. Identify and explain THREE major components of ‘Value-for-Money’ audit. (6 Marks)

c. Explain FIVE steps towards a successful ‘Value-for-Money’ audit. (2½ Marks)

d. Identify FIVE factors which contribute to an effective ‘Value-for-Money’ audit. (5 Marks)

e. Explain the precise roles of the internal audit unit in relation to ‘Value-for-Money’ audit of a Government Business Entity (GBE). (4 Marks)

Answer

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

Topic: Public sector audit

PSAF – Nov 2018 – L2 – Q1 – Regulatory and Institutional Framework

Discuss actions against companies with non-compliant financial reports, calculate NEITI unspent funds, outline NEITI functions and procedures for appointing auditors.

Question

The Federal Government of Nigeria is committed to the principle of transparency and accountability in all its financial activities. The country has diverse sources of revenue which include natural resources, ranging from iron-ore, crude oil, zinc, tin-ore, and coal. In order to enhance its agenda of “zero tolerance for corruption,” the country established, among others, the Nigeria Extractive Industry Transparency Initiative Commission (NEITI) with the sole aim of reducing corruption in the extractive industry. The establishment of the commission was backed by an Act of National Assembly in 2007.

The commission normally carries out annual audits of accounts of companies in the extractive industry after obtaining their statements of accounts on a regular basis. Records available to NEITI revealed that five out of fifty-two companies in the industry failed to render their statements of accounts for the year 2016; another eight companies rendered falsified statements of accounts, while thirty-nine companies rendered accurate statements of accounts.

The records of receipts and expenditures of NEITI revealed total receipts of N2,396,581,900 in 2016, out of which N1,998,500,770 was expended on the commission’s activities up to December 31, 2016.
Further scrutiny of the accounts revealed receipts of gratification by some government officials in the eight companies that presented falsified statements of accounts. There were also expenses on frivolous overseas tours allegedly for attending seminars and workshops.

In line with the Act that established the commission, the audit reports on the financial activities of the companies in the extractive industry have been sent to the President and the National Assembly.

Required:
a. Discuss five actions that should be taken against the companies that failed to render their statements of accounts and those that rendered falsified statements of accounts.
(7½ Marks)
b. Calculate the unspent amount by the commission as at December 31, 2016 and the treatment of the unspent amount.
(4 Marks)
c. Outline five functions of NEITI as contained in the Act that established it and indicate the members of the National Stakeholder Working Group (NSWG) as contained in the NEITI Act, 2007.
(12½ Marks)
d. Explain six procedures for the appointment of auditors and publication of reports as contained in Section 4 of NEITI Act, 2007.
(6 Marks)

Answer

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Tags: Audit, Extractive Industry, financial accountability, NEITI, Regulatory Framework, Transparency
Level: Level 2

Topic: Regulatory and Institutional Framework
Series: NOV 2018

MI – May 2018 – L1 – SA – Q13 – Information Systems

Role of Information System Auditors in disaster recovery.

Question

An Information System Auditor should be involved in:
A. Observing tests of the disaster recovery plan
B. Assessing disaster recovery plan
C. Developing disaster recovery plan
D. Maintaining disaster recovery plan
E. Reviewing disaster recovery requirement of supplier contracts

Answer

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Tags: Audit, Disaster Recovery, Information Systems
Level: Level 1

Topic: Information Systems
Series: MAY 2018

AA – Nov 2019 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explaining the difference between audit and assurance engagements, with a focus on statutory requirements and value to clients.

Question

Accounting firms offer a wide range of professional services to their clients, including audit, other assurance, and related services. These services are regulated, with many jurisdictions requiring compliance with international standards and local regulations. The type of service delivered depends both on the statutory requirements and what will provide the most value to the client and users of the financial information.

Required:
Explain the difference between audit and assurance engagements. (5 marks)

Answer

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Tags: Assurance, Audit, Engagements, Financial Statements, Professional Services
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements
Series: NOV 2019

AA – Dec 2022 – L2 – Q2b – Planning and Approach for Audit and Assurance Engagements

Outlines the mandatory terms that must be included in an engagement letter according to ISA 210.

Question

The nature of the relationship between the audit firm and the client is specified in an engagement letter, which helps reduce the possibility of misunderstanding the auditor’s position. This letter should be reviewed, updated, and signed on an annual basis.

Required:
Explain FOUR (4) mandatory terms contained in an engagement letter.

Answer

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Tags: Audit, Client Engagement, Engagement Letters, ISA 210, Terms
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements
Series: DEC 2022

AA – Dec 2022 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of self-regulation and outlines the roles of ICAG in regulating the accountancy profession in Ghana.

Question

Institute of Chartered Accountants, Ghana (ICAG) is established by the Institute of Chartered Accountants, Ghana, Act 2020 (Act 1058). Its mission is to train professional accountants of the highest quality, ready to provide cutting-edge services to their clients at all times, upholding the ethical values of the accountancy profession. In addition, all companies must have their financial statements audited by accountants regulated by ICAG as it is the sole regulator of the accountancy practice in Ghana.

Required:

i) Define the concept of self-regulation.
ii) Outline THREE (3) roles of a regulatory body such as ICAG in regulating the accountancy profession in Ghana.

Answer

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Tags: Accountancy profession, Audit, Ghana, ICAG, Regulatory Bodies, Self-regulation
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements
Series: DEC 2022

AA – Nov 2016 – L2 – Q1a – Types of Audit and Assurance Engagements

Explain the differences between audit and review engagements.

Question

An assurance engagement is an evaluation or measurement of a subject matter by a professional accountant that is the responsibility of another party, against identified suitable criteria to express a conclusion that provides the intended user with a level of assurance about that subject. Both audit and review work are assurance engagements.

Required:
Describe FIVE differences between an audit and a review engagement.

Answer

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Tags: Assurance engagements, Audit, Review
Level: Level 2

Topic: Types of Audit and Assurance Engagements
Series: NOV 2016

AA – May 2020 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Define and explain the concept of "true and fair view" in the context of ISA 700/701.

Question

The main objective of an audit is to enable the auditor express an opinion on the financial statements being audited. ISA 700/701 requires that the auditors’ opinion should state whether the financial statements give a true and fair view and are fairly presented in all material respects in accordance with applicable financial reporting framework where an unmodified opinion is expressed.

Required:
Explain what is meant by true and fair view. (5 marks)

Answer

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Tags: Audit, Auditor's Opinion, Financial Statements, ISA 700/701, True and Fair View
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements
Series: MAY 2020

AA – April 2022 – L2 – Q1b – Audit and Assurance Evidence

Explain five factors that determine reliance on analytical procedures.

Question

ISA 520: “Analytical Procedures” provides guidance to auditors on the use of analytical procedures during the course of an external audit.

Required:
Explain FIVE (5) factors to consider when determining the extent of reliance that can be placed on the results of such procedures. (5 marks)

Answer

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Tags: Analytical procedures, Audit, ISA 520, Reliance Factors
Level: Level 2

Topic: Audit and Assurance Evidence
Series: APR 2022

Question Tag: Audit

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AAA – Nov 2013 – L3 – A – Q20 – Audit of Specialized Industries

This question tests knowledge of reserves that may or may not be reviewed during the audit of a non-life insurance company.

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AAA – Nov 2013 – L3 – A – Q6 – Assurance Engagements

This question assesses knowledge of assurance engagements and identifies an activity that is not an assurance engagement.

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AAA – Nov 2013 – L3 – A – Q2 – Audit of IT Systems and Data Analytics

This question assesses the knowledge of internal controls in a computerized accounting system.

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AAA – Nov 2013 – L3 – A – Q1 – Audit Reporting

This question tests understanding of considerations for report writing in investigations.

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AAA – Nov 2012 – L3 – SB – Q5 – Audit of Specialized Industries

This question explores the challenges faced in auditing a teaching hospital and the peculiarities of auditing farm accounts.

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AAA – Nov 2012 – L3 – SB – Q2 – Audit of Accounting Estimates and Fair Value Measurements (IAS 36, IFRS 13)

This question discusses the audit steps required to assess the true position of a loan portfolio and the provision for doubtful debts.

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AAA – Nov 2012 – L3 – AII – Q16 – Assurance Engagements

Identifies the linkage of responsible parties in assurance engagements to financial statement examination.

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AAA – Nov 2011 – L3 – SAII – Q13 – Audit of Corporate Governance

Source of corporate governance guidelines in Nigeria.

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CSME – May 2022 – L2 – SB – Q3 – Environment analysis

Explain the nature, benefits, and key elements of environmental reporting, audits, and Environmental Management Accounting (EMA).

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PSAF – Nov 2016 – L2 – Q4b – Government Expenditure

This question distinguishes between the Board of Survey and Board of Enquiry, and discusses the conditions for constituting a Board of Enquiry.

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AA – Nov 2019 – L2 – Q2 – Ethical Issues in Auditing

Discuss the concept of expectation gap in auditing and the reasons an auditor may not detect fraud.

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PSAF – May 2018 – L2 – Q4 – Public Sector Audit

Explain the concept of Value-for-Money audit, its components, steps, and factors contributing to an effective VFM audit.

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PSAF – Nov 2018 – L2 – Q1 – Regulatory and Institutional Framework

Discuss actions against companies with non-compliant financial reports, calculate NEITI unspent funds, outline NEITI functions and procedures for appointing auditors.

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MI – May 2018 – L1 – SA – Q13 – Information Systems

Role of Information System Auditors in disaster recovery.

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AA – Nov 2019 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explaining the difference between audit and assurance engagements, with a focus on statutory requirements and value to clients.

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AA – Dec 2022 – L2 – Q2b – Planning and Approach for Audit and Assurance Engagements

Outlines the mandatory terms that must be included in an engagement letter according to ISA 210.

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AA – Dec 2022 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Explains the concept of self-regulation and outlines the roles of ICAG in regulating the accountancy profession in Ghana.

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AA – Nov 2016 – L2 – Q1a – Types of Audit and Assurance Engagements

Explain the differences between audit and review engagements.

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AA – May 2020 – L2 – Q1a – Introduction to Audit and Assurance Engagements

Define and explain the concept of "true and fair view" in the context of ISA 700/701.

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AA – April 2022 – L2 – Q1b – Audit and Assurance Evidence

Explain five factors that determine reliance on analytical procedures.

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