Question Tag: Auditor Responsibilities

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AAA – Nov 2013 – L3 – A – Q7 – Auditor’s Legal Liability

This question tests understanding of actions that could result in criminal liability for an auditor.

Question

An auditor will be criminally liable if he engages in the following, EXCEPT
A. Aiding a client to devise or execute crime
B. Agreeing with a client to conceal or destroy vital evidence
C. Advising a client to commit a criminal offence
D. Advising a client on steps to minimize tax liability taking advantage of the law
E. Assisting the client to commit an offence relating to money laundering

Answer

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Tags: Auditor Responsibilities, Criminal Liability, Ethics, Legal Liability
Level: Level 3

Topic: Auditor’s Legal Liability
Series: NOV 2012

AAA – Nov 2012 – L3 – SB – Q4 – Forensic Auditing

This question explores forensic audit, its application in fraud investigation, and compares auditor responsibilities in statutory versus forensic audits.

Question

In accordance with ISA 240, the primary responsibility for the prevention and detection of fraud rests with Management. But the issue of Accountants seeking specialization as forensic auditors has continued to dominate discussion on professional practice.

Required:
a. Explain forensic audit and how it applies to fraud investigation. (5 Marks)

b. Compare the responsibilities of the auditor in respect of fraud when conducting:
i. Statutory Audit (5 Marks)
ii. Forensic Audit (5 Marks)
(Total 15 Marks)

Answer

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Tags: Auditor Responsibilities, Forensic Audit, Fraud Detection, Professional Practice, Statutory Audit
Level: Level 3

Topic: Forensic Auditing
Series: NOV 2012

AAA – Nov 2011 – L3 – SB – Q4 – Ethical Issues in Auditing

Clarifies auditor's statutory responsibilities, provisions in CAMA to reduce the communication gap, and controls for addressing performance gaps.

Question

The role of auditors is commonly misconceived. Many people argue that the auditor is expected to detect all frauds and irregularities in a client’s business. Others believe that the auditor should act more like a court of justice where truth is defended. In fact, the auditor’s responsibilities, powers, and duties are defined by statutes, ethics, and auditing standards.

Required:

(a) What are the provisions available in the Companies and Allied Matters Act Cap C20 LFN, 2004, which seek to reduce the communication gap between the auditor and the shareholders?
(7 Marks)

(b) Explain EIGHT controls available to address the problem of the performance gap.
(8 Marks)

Answer

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Tags: Audit Controls, Auditor Responsibilities, Communication Gap, Companies and Allied Matters Act, Performance Gap
Level: Level 3

Topic: Ethical Issues in Auditing
Series: NOV 2011

AA – Nov 2014 – L2 – Q4 – Fraud and Error

Describe how internal and external auditors handle fraud and error risks, and evaluate specific fraud risks at Rock Holidays.

Question

Fraud and error present risks to an entity. Both internal and external auditors are required to deal with risks in an entity. However, the responsibilities of internal and external auditors in relation to the risk of fraud and error differ.

Required:

a. Explain how the internal audit function helps an entity with the risk of fraud and error. (7 Marks)

b. Explain the responsibilities of external auditors with respect to the risk of fraud and error in an audit of financial statements. (7 Marks)

c. Rock Holidays is an independent travel agency. It does not package holidays itself. It takes commission on holidays sold to customers through its chain of high street shops. Staff are partly paid on a commission basis. Well-established tour operators run the holidays that Rock Holidays sells. The network reservations system through which holidays are booked and the computerized accounting system are both well-established systems used by many independent travel agencies.

Payments by customers, including deposits, are accepted in cash and by debit and credit cards. Rock Holidays is legally required to pay an amount of money (based on its total sales for the year) into a central fund maintained to compensate customers if the agency should cease operations.

Describe the nature of the risks arising from fraud and error to which Rock Holidays is subject. (6 Marks)

Answer

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Tags: Auditor Responsibilities, Corporate Governance, External audit, Fraud risk, Internal Audit, Rock Holidays
Level: Level 2

Topic: Fraud and Error

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

AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

Question

ISA 501: Audit Evidence – Additional considerations for specific items requires that, if inventory is material to the financial statements, the auditor should obtain sufficient appropriate audit evidence by, among others, being present at physical inventory counting unless impractical. The Managing Director of MLT Ltd is at a loss as to why in this age of technological advancement, auditors insist on being present during physical inventory count.

Required:
i) Explain FOUR (4) reasons for conducting physical inventory counts.
ii) Discuss the responsibilities of Management and Auditors with respect to physical inventory counts.

Answer

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Tags: Auditor Responsibilities, Inventory Management, ISA 501, Management responsibilities, Physical Inventory Count
Level: Level 2

Topic: Audit and Assurance Evidence
Series: DEC 2022

AA – Nov 2021 – L2 – Q5a – Professional and Ethical Considerations, Engagement Letters

Explains four key terms to be included in an engagement letter in accordance with ISA 210.

Question

SA 210: Agreeing to the terms of an engagement states that Engagement Letters are issued to serve as contracts between clients and auditors.

Required:
Justify FOUR (4) terms that could be included in an Engagement Letter in accordance with ISA 210.

Answer

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Tags: Audit Engagement, Auditor Responsibilities, Client Responsibilities, Engagement letter, ISA 210
Level: Level 2

Series: NOV 2021

AA – May 2019 – L2 – Q1a – Responsibilities for the prevention and detection of fraud

Explains auditor’s responsibility regarding fraud detection and outlines audit procedures to detect fraud anomalies.

Question

a) J.K. Asenso is a member of a team auditing the financial statement of Sascraku Co. Ltd for the year ended 31 December 2017. Shortly after the end of the audit, the media made an allegation of fraudulent activities with the aim of reducing tax liability against the company. A committee was appointed by Ghana Revenue Authority (GRA) to examine the books of the company to substantiate the allegations.

The committee discovered the following anomalies:

Diverting receipts to private bank accounts;
Stealing physical assets or intellectual property;
The entity paid for goods that had not been received;
Assets had been used for personal purposes.

The directors were not happy with the work of the auditors due to their inability to discover the above anomalies.

Required:
i) Explain the responsibility of the Auditor with respect to detection and prevention of fraud.
(5 marks)
ii) Outline the audit procedures that the auditors should have adopted to detect the above anomalies.
(5 marks)

Answer

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Tags: Audit Procedures, Auditor Responsibilities, Corporate Governance, Fraud Detection, Internal Control
Level: Level 2

Topic: Responsibilities for the prevention and detection of fraud
Series: MAY 2019

AAA – Nov 2013 – L3 – A – Q7 – Auditor’s Legal Liability

This question tests understanding of actions that could result in criminal liability for an auditor.

Question

Answer

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Tags: Auditor Responsibilities, Criminal Liability, Ethics, Legal Liability
Level: Level 3

Topic: Auditor’s Legal Liability
Series: NOV 2012

AAA – Nov 2012 – L3 – SB – Q4 – Forensic Auditing

This question explores forensic audit, its application in fraud investigation, and compares auditor responsibilities in statutory versus forensic audits.

Question

Required:
a. Explain forensic audit and how it applies to fraud investigation. (5 Marks)

b. Compare the responsibilities of the auditor in respect of fraud when conducting:
i. Statutory Audit (5 Marks)
ii. Forensic Audit (5 Marks)
(Total 15 Marks)

Answer

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Tags: Auditor Responsibilities, Forensic Audit, Fraud Detection, Professional Practice, Statutory Audit
Level: Level 3

Topic: Forensic Auditing
Series: NOV 2012

AAA – Nov 2011 – L3 – SB – Q4 – Ethical Issues in Auditing

Clarifies auditor's statutory responsibilities, provisions in CAMA to reduce the communication gap, and controls for addressing performance gaps.

Question

Required:

(a) What are the provisions available in the Companies and Allied Matters Act Cap C20 LFN, 2004, which seek to reduce the communication gap between the auditor and the shareholders?
(7 Marks)

(b) Explain EIGHT controls available to address the problem of the performance gap.
(8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Controls, Auditor Responsibilities, Communication Gap, Companies and Allied Matters Act, Performance Gap
Level: Level 3

Topic: Ethical Issues in Auditing
Series: NOV 2011

AA – Nov 2014 – L2 – Q4 – Fraud and Error

Describe how internal and external auditors handle fraud and error risks, and evaluate specific fraud risks at Rock Holidays.

Question

Required:

a. Explain how the internal audit function helps an entity with the risk of fraud and error. (7 Marks)

b. Explain the responsibilities of external auditors with respect to the risk of fraud and error in an audit of financial statements. (7 Marks)

Describe the nature of the risks arising from fraud and error to which Rock Holidays is subject. (6 Marks)

Answer

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Tags: Auditor Responsibilities, Corporate Governance, External audit, Fraud risk, Internal Audit, Rock Holidays
Level: Level 2

Topic: Fraud and Error

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

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

AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

Question

Required:
i) Explain FOUR (4) reasons for conducting physical inventory counts.
ii) Discuss the responsibilities of Management and Auditors with respect to physical inventory counts.

Answer

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Tags: Auditor Responsibilities, Inventory Management, ISA 501, Management responsibilities, Physical Inventory Count
Level: Level 2

Topic: Audit and Assurance Evidence
Series: DEC 2022

AA – Nov 2021 – L2 – Q5a – Professional and Ethical Considerations, Engagement Letters

Explains four key terms to be included in an engagement letter in accordance with ISA 210.

Question

SA 210: Agreeing to the terms of an engagement states that Engagement Letters are issued to serve as contracts between clients and auditors.

Required:
Justify FOUR (4) terms that could be included in an Engagement Letter in accordance with ISA 210.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Engagement, Auditor Responsibilities, Client Responsibilities, Engagement letter, ISA 210
Level: Level 2

Series: NOV 2021

AA – May 2019 – L2 – Q1a – Responsibilities for the prevention and detection of fraud

Explains auditor’s responsibility regarding fraud detection and outlines audit procedures to detect fraud anomalies.

Question

The committee discovered the following anomalies:

Diverting receipts to private bank accounts;
Stealing physical assets or intellectual property;
The entity paid for goods that had not been received;
Assets had been used for personal purposes.

The directors were not happy with the work of the auditors due to their inability to discover the above anomalies.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Auditor Responsibilities, Corporate Governance, Fraud Detection, Internal Control
Level: Level 2

Topic: Responsibilities for the prevention and detection of fraud
Series: MAY 2019

Question Tag: Auditor Responsibilities

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AAA – Nov 2013 – L3 – A – Q7 – Auditor’s Legal Liability

This question tests understanding of actions that could result in criminal liability for an auditor.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q7 – Auditor’s Legal Liability"

AAA – Nov 2012 – L3 – SB – Q4 – Forensic Auditing

This question explores forensic audit, its application in fraud investigation, and compares auditor responsibilities in statutory versus forensic audits.

You're reporting an error for "AAA – Nov 2012 – L3 – SB – Q4 – Forensic Auditing"

AAA – Nov 2011 – L3 – SB – Q4 – Ethical Issues in Auditing

Clarifies auditor's statutory responsibilities, provisions in CAMA to reduce the communication gap, and controls for addressing performance gaps.

You're reporting an error for "AAA – Nov 2011 – L3 – SB – Q4 – Ethical Issues in Auditing"

AA – Nov 2014 – L2 – Q4 – Fraud and Error

Describe how internal and external auditors handle fraud and error risks, and evaluate specific fraud risks at Rock Holidays.

You're reporting an error for "AA – Nov 2014 – L2 – Q4 – Fraud and Error"

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.

You're reporting an error for "AA – Nov 2019 – L2 – Q2 – Ethical Issues in Auditing"

AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

You're reporting an error for "AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence"

AA – Nov 2021 – L2 – Q5a – Professional and Ethical Considerations, Engagement Letters

Explains four key terms to be included in an engagement letter in accordance with ISA 210.

You're reporting an error for "AA – Nov 2021 – L2 – Q5a – Professional and Ethical Considerations, Engagement Letters"

AA – May 2019 – L2 – Q1a – Responsibilities for the prevention and detection of fraud

Explains auditor’s responsibility regarding fraud detection and outlines audit procedures to detect fraud anomalies.

You're reporting an error for "AA – May 2019 – L2 – Q1a – Responsibilities for the prevention and detection of fraud"

AAA – Nov 2013 – L3 – A – Q7 – Auditor’s Legal Liability

This question tests understanding of actions that could result in criminal liability for an auditor.

You're reporting an error for "AAA – Nov 2013 – L3 – A – Q7 – Auditor’s Legal Liability"

AAA – Nov 2012 – L3 – SB – Q4 – Forensic Auditing

This question explores forensic audit, its application in fraud investigation, and compares auditor responsibilities in statutory versus forensic audits.

You're reporting an error for "AAA – Nov 2012 – L3 – SB – Q4 – Forensic Auditing"

AAA – Nov 2011 – L3 – SB – Q4 – Ethical Issues in Auditing

Clarifies auditor's statutory responsibilities, provisions in CAMA to reduce the communication gap, and controls for addressing performance gaps.

You're reporting an error for "AAA – Nov 2011 – L3 – SB – Q4 – Ethical Issues in Auditing"

AA – Nov 2014 – L2 – Q4 – Fraud and Error

Describe how internal and external auditors handle fraud and error risks, and evaluate specific fraud risks at Rock Holidays.

You're reporting an error for "AA – Nov 2014 – L2 – Q4 – Fraud and Error"

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.

You're reporting an error for "AA – Nov 2019 – L2 – Q2 – Ethical Issues in Auditing"

AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence

Discusses the reasons for conducting a physical inventory count and outlines the responsibilities of management and auditors with respect to physical inventory counts

You're reporting an error for "AA – Dec 2022 – L2 – Q3c – Audit and Assurance Evidence"

AA – Nov 2021 – L2 – Q5a – Professional and Ethical Considerations, Engagement Letters

Explains four key terms to be included in an engagement letter in accordance with ISA 210.

You're reporting an error for "AA – Nov 2021 – L2 – Q5a – Professional and Ethical Considerations, Engagement Letters"

AA – May 2019 – L2 – Q1a – Responsibilities for the prevention and detection of fraud

Explains auditor’s responsibility regarding fraud detection and outlines audit procedures to detect fraud anomalies.

You're reporting an error for "AA – May 2019 – L2 – Q1a – Responsibilities for the prevention and detection of fraud"

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