Auditing Standards – NBC Institute

AA – Nov 2021 – L2 – Q1a – Audit Reports

Define Key Audit Matters (KAMs) as per ISA 701 and how they are communicated in the auditor’s report.

Question

Independent Auditor’s Report
To The Members Of Fair Deals Limited (Extract)

Key Audit Matters
Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Goodwill
Goodwill under IFRSs: the company is required to annually test the amount of goodwill for impairment. This annual impairment test was significant to our audit because the balance of N3,024,115 as of December 31, 2020 is material to the financial statements. In addition, management’s assessment process is complex and highly judgmental and is based on assumptions, specifically achieving projected revenue which are affected by expected future market or economic conditions, particularly those in the North East zone.
Our audit procedures included, among others, using a valuation expert to assist us in evaluating the assumptions and methodologies used by the company in particular those relating to the forecast revenue growth and profit margins for domestic wares production. We also focused on the adequacy of the company disclosures about those assumptions to which the outcome of the impairment test is most sensitive, that is, those that have the most significant effect on the determination of the recoverable amount of goodwill.

Revenue Recognition
The amount of revenue and profit recognised in the year on the sale of domestic wares and after-market services is dependent on the appropriate assessment of whether or not each long-term after-market contract for services is linked to or separated from the contract for sale of domestic wares. As the commercial arrangements can be complex, significant judgment is applied in selecting the accounting basis in each case. In our view, revenue recognition is significant to our audit as the company might inappropriately account for sales of domestic wares and long-term service agreements as a single arrangement for accounting purposes and this would usually lead to revenue and profit being recognised too early because the margin in the long-term service agreement is usually higher than the margin in the domestic wares sale agreement.
Our audit procedures to address the risk of material misstatement relating to revenue recognition, which was considered to be a significant risk, included:

Testing of controls, assisted by our own IT specialists, including, among others, those over: input of individual advertising campaigns’ terms and pricing; comparison of those terms and pricing data against the related overarching contracts with advertising agencies; and linkage to viewer data;
Detailed analysis of revenue and the timing of its recognition based on expectations derived from our industry knowledge and external market data, following up variances from our expectations.

Abuja, Nigeria (signed)
Date
Chartered Accountants

ISA 701 Communicating key Audit matters in the Independent Auditors Report was introduced to make the auditor’s report more informative and useful for the intended users.

Answer

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Tags: Auditing Standards, Goodwill, ISA 701, Key Audit Matters, Revenue Recognition
Level: Level 2

Topic: Audit Reports
Series: NOV 2021

AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities

Explain why it is important for audits to be conducted in accordance with common auditing standards.

Question

Auditors are regulated by professional bodies and should follow recognised auditing standards such as International Standards on Auditing (ISAs).

Required:
Explain why it is important for audits to be conducted in accordance with Auditing Standards that are common to all audits.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Consistency, Audit quality, Auditing Standards, Financial Statements, Professional Bodies, Regulatory Framework
Level: Level 2

Topic: Regulatory Framework and Audit Responsibilities
Series: NOV 2017

AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,

This question discusses the advantages, disadvantages, and consequences of enforcing auditing standards by statute.

Question

(b) Discuss the advantages and disadvantages of auditing standards to auditors and the consequences of them being enforceable by statute. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Framework, Auditing Standards, Professional Judgment, Regulatory Framework, Statutory Audit
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues

Discusses factors influencing new auditing standards and procedures for their development by the International Federation of Accountants (IFAC).

Question

The auditing profession is very dynamic and constantly confronted with new challenges emanating from the political and economic spheres. To meet these challenges the global authority responsible for the regulation of accountancy profession, The International Federation of Accountants (IFAC) has been ensuring that the standards for conduct of audit and assurance engagements are revised and brought up to date all the time.

Required: i) Discuss FOUR (4) factors that influence the development of new Auditing Standards. (5 marks)

ii) Identify the procedures for developing new Auditing Standards. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditing Standards, IAASB, IFAC, Standard Development Process
Level: Level 3

Topic: Current issues, The regulatory environment
Series: JULY 2023

AAA – May 2020 – L3 – Q5a – The regulatory environment

Analyze the factors influencing the development of new auditing standards and discuss the procedures involved in their creation.

Question

Required:

i) Analyze the factors that influence the development of new Auditing Standards. (6 marks)

ii) Discuss the procedures for developing new Auditing Standards. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Auditing Standards, IAASB, IFAC, Regulatory Environment
Level: Level 3

Topic: The regulatory environment
Series: MAY 2020

AA – Nov 2021 – L2 – Q1a – Audit Reports

Define Key Audit Matters (KAMs) as per ISA 701 and how they are communicated in the auditor’s report.

Question

Independent Auditor’s Report
To The Members Of Fair Deals Limited (Extract)

Testing of controls, assisted by our own IT specialists, including, among others, those over: input of individual advertising campaigns’ terms and pricing; comparison of those terms and pricing data against the related overarching contracts with advertising agencies; and linkage to viewer data;
Detailed analysis of revenue and the timing of its recognition based on expectations derived from our industry knowledge and external market data, following up variances from our expectations.

Abuja, Nigeria (signed)
Date
Chartered Accountants

ISA 701 Communicating key Audit matters in the Independent Auditors Report was introduced to make the auditor’s report more informative and useful for the intended users.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditing Standards, Goodwill, ISA 701, Key Audit Matters, Revenue Recognition
Level: Level 2

Topic: Audit Reports
Series: NOV 2021

AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities

Explain why it is important for audits to be conducted in accordance with common auditing standards.

Question

Auditors are regulated by professional bodies and should follow recognised auditing standards such as International Standards on Auditing (ISAs).

Required:
Explain why it is important for audits to be conducted in accordance with Auditing Standards that are common to all audits.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Consistency, Audit quality, Auditing Standards, Financial Statements, Professional Bodies, Regulatory Framework
Level: Level 2

Topic: Regulatory Framework and Audit Responsibilities
Series: NOV 2017

AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,

This question discusses the advantages, disadvantages, and consequences of enforcing auditing standards by statute.

Question

(b) Discuss the advantages and disadvantages of auditing standards to auditors and the consequences of them being enforceable by statute. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Framework, Auditing Standards, Professional Judgment, Regulatory Framework, Statutory Audit
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues

Discusses factors influencing new auditing standards and procedures for their development by the International Federation of Accountants (IFAC).

Question

Required: i) Discuss FOUR (4) factors that influence the development of new Auditing Standards. (5 marks)

ii) Identify the procedures for developing new Auditing Standards. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditing Standards, IAASB, IFAC, Standard Development Process
Level: Level 3

Topic: Current issues, The regulatory environment
Series: JULY 2023

AAA – May 2020 – L3 – Q5a – The regulatory environment

Analyze the factors influencing the development of new auditing standards and discuss the procedures involved in their creation.

Question

Required:

i) Analyze the factors that influence the development of new Auditing Standards. (6 marks)

ii) Discuss the procedures for developing new Auditing Standards. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Auditing Standards, IAASB, IFAC, Regulatory Environment
Level: Level 3

Topic: The regulatory environment
Series: MAY 2020

Question Tag: Auditing Standards

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AA – Nov 2021 – L2 – Q1a – Audit Reports

Define Key Audit Matters (KAMs) as per ISA 701 and how they are communicated in the auditor’s report.

AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities

Explain why it is important for audits to be conducted in accordance with common auditing standards.

AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,

This question discusses the advantages, disadvantages, and consequences of enforcing auditing standards by statute.

AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues

Discusses factors influencing new auditing standards and procedures for their development by the International Federation of Accountants (IFAC).

AAA – May 2020 – L3 – Q5a – The regulatory environment

Analyze the factors influencing the development of new auditing standards and discuss the procedures involved in their creation.

AA – Nov 2021 – L2 – Q1a – Audit Reports

Define Key Audit Matters (KAMs) as per ISA 701 and how they are communicated in the auditor’s report.

AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities

Explain why it is important for audits to be conducted in accordance with common auditing standards.

AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,

This question discusses the advantages, disadvantages, and consequences of enforcing auditing standards by statute.

AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues

Discusses factors influencing new auditing standards and procedures for their development by the International Federation of Accountants (IFAC).

AAA – May 2020 – L3 – Q5a – The regulatory environment

Analyze the factors influencing the development of new auditing standards and discuss the procedures involved in their creation.

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AA – Nov 2021 – L2 – Q1a – Audit Reports

Define Key Audit Matters (KAMs) as per ISA 701 and how they are communicated in the auditor’s report.

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AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities

Explain why it is important for audits to be conducted in accordance with common auditing standards.

You're reporting an error for "AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities"

AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,

This question discusses the advantages, disadvantages, and consequences of enforcing auditing standards by statute.

You're reporting an error for "AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,"

AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues

Discusses factors influencing new auditing standards and procedures for their development by the International Federation of Accountants (IFAC).

You're reporting an error for "AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues"

AAA – May 2020 – L3 – Q5a – The regulatory environment

Analyze the factors influencing the development of new auditing standards and discuss the procedures involved in their creation.

You're reporting an error for "AAA – May 2020 – L3 – Q5a – The regulatory environment"

AA – Nov 2021 – L2 – Q1a – Audit Reports

Define Key Audit Matters (KAMs) as per ISA 701 and how they are communicated in the auditor’s report.

You're reporting an error for "AA – Nov 2021 – L2 – Q1a – Audit Reports"

AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities

Explain why it is important for audits to be conducted in accordance with common auditing standards.

You're reporting an error for "AA – Nov 2017 – L2 – Q1b – Regulatory Framework and Audit Responsibilities"

AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,

This question discusses the advantages, disadvantages, and consequences of enforcing auditing standards by statute.

You're reporting an error for "AA – May 2016 – L2 – Q1b – Audit and Assurance Evidence,"

AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues

Discusses factors influencing new auditing standards and procedures for their development by the International Federation of Accountants (IFAC).

You're reporting an error for "AAA – July 2023 – L3 – Q5a – The regulatory environment | Current issues"

AAA – May 2020 – L3 – Q5a – The regulatory environment

Analyze the factors influencing the development of new auditing standards and discuss the procedures involved in their creation.

You're reporting an error for "AAA – May 2020 – L3 – Q5a – The regulatory environment"

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