Bank Balances – NBC Institute

AAA – Nov 2018 – L3 – Q3 – Audit Completion and Final Review

Training new associates on procedures for gathering and assessing audit evidence

Question

You are the auditor in charge of the audit of Big Bank Plc. Two new associates who recently joined the firm have been assigned to your team, and you need to provide them on-the-job training on the audit process. The training should focus on audit evidence and testing procedures for gathering audit evidence.

Required:

a. Explain six procedures for gathering audit evidence. (6 Marks)

b. Explain to members of your team the terms “sufficient” and “appropriate” audit evidence. (2 Marks)

c. Explain four principles that an auditor uses in assessing the reliability of audit evidence in line with ISA 500. (4 Marks)

d. You have allocated the following audit areas to the two new associates on your team:

i. Bank and cash balances; and
ii. Payroll.

Identify the audit procedures that you will discuss with your team members for substantive testing of the audit areas mentioned above. (8 Marks)

Answer

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Tags: Audit evidence, Bank Balances, ISA 500, Payroll, Substantive Testing
Level: Level 3

Topic: Audit Completion and Final Review

AA – May 2019 – L2 – Q5 – Audit Evidence

Justification for requiring confirmations of receivables, payables, and bank balances, and contents of confirmation letters.

Question

In the course of an audit assignment, an auditor requires an independent and external confirmation for the following items:

Receivables
Payables
Bank Balances

You are required to:

a. Justify the need for confirmation in respect of the items listed above. (9 Marks)

b. State the contents of each of the letters sent to request for confirmation in TWO of the items stated above. (6 Marks)

Answer

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Tags: Audit Confirmation, Audit evidence, Bank Balances, Payables, Receivables
Level: Level 2

Topic: Audit evidence
Series: MAY 2019

FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)

Analysis of related party transactions and disclosure requirements as per IAS 24 for Grandkano Nig. Plc.

Question

Grandkano Nig. Plc. is a company listed on the Nigerian Stock Exchange (NSE) and located in the northwestern part of the country. The company has been paying yearly penalties to NSE in respect of non-disclosure of related party transactions in its published financial statements. The company has therefore approached a partner in your firm to assist in this regard in order to avoid payment of these yearly penalties. The partner in your firm has requested for a list of all transactions with parties connected with the company and the directors of the company provided the following summary:

(i) A factory building had been sold to the brother of Alhaji Nagode, the Managing Director of Grandkano Nig. Plc. for N300 million (net of selling cost of N5 million). The market value of the property (factory building) was N322.5 million. The carrying amount of the factory building was N375 million and its value in use was N270 million.

(ii) Every month Grandkano Nig. Plc. sells N750,000 worth of goods to Malam Bayero, the finance director. The finance director has set up a small retail business for his son (Dongoyaro), and the goods are sold at cost price to him. The annual turnover of Grandkano Nig. Plc. is N4.5 billion. Also, Malam Bayero has purchased his official company’s car from the company for N675,000 (market value N1.2 million). Malam Bayero earns a salary of N7.5 million per annum, and he is a very wealthy man.

Required:
a. Reasons why it is important to disclose related party transactions. (5 Marks)

b. The nature of any disclosures required in transactions (i) and (ii) above under IAS 24 related party disclosures. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditing Procedures, Bank Balances, External Confirmation, Payables, Receivables
Level: Level 2

Topic: Related Party Transactions (IAS 24)
Series: MAY 2019

AAA – Nov 2018 – L3 – Q3 – Audit Completion and Final Review

Training new associates on procedures for gathering and assessing audit evidence

Question

Required:

a. Explain six procedures for gathering audit evidence. (6 Marks)

b. Explain to members of your team the terms “sufficient” and “appropriate” audit evidence. (2 Marks)

c. Explain four principles that an auditor uses in assessing the reliability of audit evidence in line with ISA 500. (4 Marks)

d. You have allocated the following audit areas to the two new associates on your team:

i. Bank and cash balances; and
ii. Payroll.

Identify the audit procedures that you will discuss with your team members for substantive testing of the audit areas mentioned above. (8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Bank Balances, ISA 500, Payroll, Substantive Testing
Level: Level 3

Topic: Audit Completion and Final Review

AA – May 2019 – L2 – Q5 – Audit Evidence

Justification for requiring confirmations of receivables, payables, and bank balances, and contents of confirmation letters.

Question

In the course of an audit assignment, an auditor requires an independent and external confirmation for the following items:

Receivables
Payables
Bank Balances

You are required to:

a. Justify the need for confirmation in respect of the items listed above. (9 Marks)

b. State the contents of each of the letters sent to request for confirmation in TWO of the items stated above. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Confirmation, Audit evidence, Bank Balances, Payables, Receivables
Level: Level 2

Topic: Audit evidence
Series: MAY 2019

FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)

Analysis of related party transactions and disclosure requirements as per IAS 24 for Grandkano Nig. Plc.

Question

Required:
a. Reasons why it is important to disclose related party transactions. (5 Marks)

b. The nature of any disclosures required in transactions (i) and (ii) above under IAS 24 related party disclosures. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditing Procedures, Bank Balances, External Confirmation, Payables, Receivables
Level: Level 2

Topic: Related Party Transactions (IAS 24)
Series: MAY 2019

Question Tag: Bank Balances

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AAA – Nov 2018 – L3 – Q3 – Audit Completion and Final Review

Training new associates on procedures for gathering and assessing audit evidence

AA – May 2019 – L2 – Q5 – Audit Evidence

Justification for requiring confirmations of receivables, payables, and bank balances, and contents of confirmation letters.

FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)

Analysis of related party transactions and disclosure requirements as per IAS 24 for Grandkano Nig. Plc.

AAA – Nov 2018 – L3 – Q3 – Audit Completion and Final Review

Training new associates on procedures for gathering and assessing audit evidence

AA – May 2019 – L2 – Q5 – Audit Evidence

Justification for requiring confirmations of receivables, payables, and bank balances, and contents of confirmation letters.

FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)

Analysis of related party transactions and disclosure requirements as per IAS 24 for Grandkano Nig. Plc.

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Question Tag: Bank Balances

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AAA – Nov 2018 – L3 – Q3 – Audit Completion and Final Review

Training new associates on procedures for gathering and assessing audit evidence

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AA – May 2019 – L2 – Q5 – Audit Evidence

Justification for requiring confirmations of receivables, payables, and bank balances, and contents of confirmation letters.

You're reporting an error for "AA – May 2019 – L2 – Q5 – Audit Evidence"

FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)

Analysis of related party transactions and disclosure requirements as per IAS 24 for Grandkano Nig. Plc.

You're reporting an error for "FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)"

AAA – Nov 2018 – L3 – Q3 – Audit Completion and Final Review

Training new associates on procedures for gathering and assessing audit evidence

You're reporting an error for "AAA – Nov 2018 – L3 – Q3 – Audit Completion and Final Review"

AA – May 2019 – L2 – Q5 – Audit Evidence

Justification for requiring confirmations of receivables, payables, and bank balances, and contents of confirmation letters.

You're reporting an error for "AA – May 2019 – L2 – Q5 – Audit Evidence"

FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)

Analysis of related party transactions and disclosure requirements as per IAS 24 for Grandkano Nig. Plc.

You're reporting an error for "FR – May 2019 – L2 – Q5 – Related Party Transactions (IAS 24)"

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