Question Tag: CAMA

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AAA – Nov 2012 – L3 – AII – Q7 – Regulatory Framework and Professional Standards

Defines the role of a chartered accountant reporting under CAMA and NSE listing requirements.

Question

A chartered accountant in public practice, who is engaged to report under the relevant provisions of the Companies and Allied Matters Act, CAP. C20, LFN 2004, and the listing requirements of the Nigerian Stock Exchange is known as …………….

Answer

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Tags: CAMA, Chartered Accountant, Nigerian Stock Exchange, Public Practice, Reporting Requirements
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

AAA – Nov 2011 – L3 – SB – Q3 – Audit of Corporate Governance

Key objectives and structures within corporate governance, focusing on the audit committee's role and board actions affecting governance.

Question

(a) Outline the main objective of corporate governance.
(3 Marks)

(b) One of the tools of corporate governance in Nigeria is the establishment of the Audit Committee under Section 359 (6) of Companies and Allied Matters Act Cap C20 LFN, 2004. What are the composition and functions of an Audit Committee?
(6 Marks)

(c) State SIX instances when the corporate governance of a public company may be compromised by the Board of Directors.
(6 Marks)

Answer

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Tags: Audit Committee, Board of Directors, CAMA, Corporate Accountability, Corporate Governance, Governance Standards
Level: Level 3

Topic: Audit of Corporate Governance
Series: NOV 2011

AA – May 2023 – L2 – SA – Q4 – Ethical Issues in Auditing

Identify threats to auditor independence, assess circumstances affecting independence, and suggest safeguards.

Question

Cringe Professional Services has been auditing Kogberegbe Limited for about 20 years. Being a limited liability company, no regulation imposed restriction on the tenure of the auditors.

The firm also provides taxation and valuation services for the company. The company has just adopted International Financial Reporting Standards and has employed the services of Cringe Professional Services for conversion services from local GAAP. The firm experienced a high staff turnover in the year and has no choice but to include the daughter of the Managing Director of the company as part of the engagement team, although as a support staff.

Management has indicated in confidence that the audit fee for the year will not be increased, except the firm can guarantee them that no adverse management letter will be issued and no loss will be made by the company as they are planning to go to the capital market to raise capital for expansion. With poor management letter and loss position, they believe that it will be difficult to achieve this.

At the end of the audit exercise, the company made a huge profit even with unfavorable economic climate, thanks to challenges associated with COVID-19. There was public outcry because it was believed that the financial statements of the company were misstated, and the auditor was accused of negligence. This necessitated the Financial Reporting Council to conduct an investigation on the company. It was found that the company restructured its debt portfolio, which was denominated in foreign currency with attendant foreign exchange risks to Naira.

The company restructured a huge intercompany loan to a 7-year principal payment holiday with principal repayment commencing September 30, 2025. The interest on the loan for the period was not brought into the books of account.

The company accrued for a NGN70.60m benefit from a transaction in 2019 from operating fees. This has been treated as income in the financial statements.

There were identified defaults by the company in relation to the payment of interests and principal on its outstanding loans and borrowings.

There were adverse ratios in the company’s financial performance ratios in the year due to interest on borrowings from financial institutions and related parties.

A revisit of the operating performance for the year revealed the following:

The entity made an operating loss of N1.22 billion.
It generated negative operating cashflows of N2.15 billion.
There was positive working capital as the current assets exceeded the current liabilities by N1.2 billion in the year.
The net assets position of the company was in the negative as the total liabilities exceeded the total assets by N9.8 billion.

The Financial Reporting Council concluded that there were threats to the auditors’ independence, hence the professional firm was penalized for that.

A concerned staff of the company asks you of the implications of the issues raised by the Financial Reporting Council.

Required:

a. Identify and explain the threats to independence of the auditor in the above scenario. (7 Marks)

b. Discuss circumstances that could give rise to threats to independence. (7 Marks)

c. Suggest appropriate safeguards which could be put in place to mitigate the identified threats. (6 Marks)

Answer

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Tags: Auditor Independence, CAMA, Conflict of Interest, Ethical Safeguards, FRC, ISA Compliance
Level: Level 2

Topic: Ethical Issues in Auditing
Series: MAY 2023

AA – May 2023 – L2 – SA – Q2 – The Role and Responsibilities of Auditors

Outline audit report matters per CAMA, auditor’s rights, and management's financial responsibilities.

Question

Your audit firm was recently appointed as the external auditors of a fast-growing fast-food outlet, Foods Only Limited. The directors are not clear as to their responsibilities and the nature of their relationship with the external auditors. The engagement partner has instructed you to visit the client and explain to the directors some fundamental aspects of the appointment.

Required:

a. Explain the matters to be stated in an audit report according to Companies and Allied Matters Act (CAMA) 2020. (5 Marks)

b. State the auditor’s rights under Companies and Allied Matters Act (CAMA). (5 Marks)

c. State the duties of external auditors under Companies and Allied Matters Act (CAMA). (5 Marks)

d. What are the responsibilities of management and those charged with governance in relation to the accounting function of the company? (5 Marks)

Answer

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Tags: Audit Compliance, Auditor's Report, Auditor's Rights, CAMA, ISA 200, Management Responsibility
Level: Level 2

Topic: The Role and Responsibilities of Auditors
Series: MAY 2023

FR – May 2024 – L2 – SA – Q2 – Conceptual Framework for Financial Reporting

Discusses the information needs of financial statement users, CAMA director report requirements, and deferred tax calculations.

Question

a. The Conceptual Framework for Financial Reporting sets out the concepts that underlie the preparation and presentation of financial statements and considers the various users of these financial statements.

Required:
Identify and discuss the information needs of the different users of financial statements. (10 Marks)

b. The Companies and Allied Matters Act (CAMA) 2020 is the primary source of company law that establishes the requirements for financial reporting by all companies in Nigeria.

Required:
Briefly explain FIVE issues that must be contained in a directors’ report in accordance with CAMA 2020. (5 Marks)

c. Babanriga Nigeria Limited acquired a factory machine for N10 million on January 1, 2019. The machine had an estimated life and residual value of 10 years and N2 million, respectively, and is depreciated on a straight-line basis. In lieu of depreciation, the tax authority allows a tax expense of 40% of the cost of this type of machine to be claimed against income tax in the year of purchase, with 25% per annum of its tax base subsequently on a reducing balance basis. The prevailing company income tax rate is 30%.

Required:
Calculate the deferred tax charge or credit which will be recorded in Babanriga Nigeria Limited’s Statement of Profit or Loss and Other Comprehensive Income for the year ended December 31, 2021, and the deferred tax balance in the Statement of Financial Position at that date. (5 Marks)

Answer

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Tags: CAMA, Conceptual Framework, Deferred Tax, Financial Reporting, Statement of Financial Position, Tax computation, User Needs
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2023

AA – Nov 2016 – L2 – Q5 – Audit of Financial Statements

This question covers the definition of an audit, the overall objectives of an independent auditor, and the rights of auditors as per Nigerian law.

Question

The Nigerian Standard of Auditing (NSA 1) and International Standard on Auditing (ISA 200) deal with the objective and general principles governing an audit of financial statements. It sets out the overall objectives of the independent auditor and explains the nature and scope of an audit designed to enable the independent auditor to meet those objectives.

Required:

a) Explain the term “Audit of the financial statement”.
(4 Marks)

b) Describe the overall objectives of the independent auditor in conducting the audit of financial statements in accordance with NSA 1 and ISA 200.
(6 Marks)

c) Sections 360 and 363 of the Companies and Allied Matters Act (CAMA) CAP 20 LFN 2004 stipulate the rights of the independent auditors in the conduct of the statutory audit. State these rights.
(5 Marks)

Answer

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Tags: Audit of Financial Statements, Auditor's Rights, CAMA, ISA 200, NSA 1
Level: Level 2

Topic: Audit of Financial Statements
Series: NOV 2016

BL – Nov 2015 – L2 – SB – Q2a – Company Law

List and explain four documents required for the incorporation of a company.

Question

Any two or more persons may form and incorporate a company by complying with the requirements of the Companies and Allied Matters Act.

Required:

Briefly explain FOUR documents required to be filed with the Corporate Affairs Commission for the incorporation of a company.
(10 Marks)

Answer

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Tags: CAMA, Company Documents, Company Incorporation, Corporate Affairs Commission
Level: Level 1

Topic: Company Law
Series: NOV 2015

FA – May 2014 – L1 – SA – Q1 – Regulatory Environment of Accounting

Identifies where statutory books and records should be kept according to CAMA.

Question

The Companies and Allied Matters Act, CAP C20 LFN 2004 requires that the statutory books and records of a company be kept at …………………………………

Answer

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Tags: CAMA, Regulatory Compliance, Statutory Records
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2014

BL – Nov 2021 – L1 – SB – Q1 – Nigerian Legal System

Defining Nigerian legal terms and advising on audit obligations for a limited liability partnership under CAMA 2020.

Question

a. Nigerian courts are enjoined to apply the common law of England, doctrines of equity, and statutes of general application that were in force on the 1st of January 1900.

Required:

Define:
i. Common law (1 Mark)
ii. Equity (1 Mark)
iii. Statutes of general application (1 Mark)

b. Mercy and Samuel, who are the only partners of a limited liability partnership, are protesting a demand letter served on them for the payment of the sum of N500,000 each by the Corporate Affairs Commission for failure to audit the partnership’s account for the immediate past year and failure to file annual returns for the same period. They are protesting on the grounds that they are not a company and, therefore, not liable to file annual returns, and that the Corporate Affairs Commission has no right to demand the audit. They have approached you as a professional to advise them.

Required:
Advise the partners in line with the provisions of the Companies and Allied Matters Act 2020 on:

i. The Corporate Affairs Commission’s demand for the partnership’s audit (4 Marks)
ii. Whether or not the partnership was under a legal duty to file annual returns with the Corporate Affairs Commission (4 Marks)

c. A limited liability partnership must have a designated partner.

Required:
What shall a designated partner be responsible for? (4 Marks)

d. ADR is the abbreviation for Alternative Dispute Resolution.

Required:

i. Explain briefly Alternative Dispute Resolution (2 Marks)
ii. State THREE mechanisms of Alternative Dispute Resolution (3 Marks)

Answer

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Tags: CAMA, Common Law, Corporate Governance, Equity, Nigerian Courts
Level: Level 1

Topic: Nigerian Legal System
Series: NOV 2021

BL – MarJul 2020 – L1 – SA – Q4 – Company Law

Question testing knowledge on the requirement for naming a private company under the Companies and Allied Matters Act 2004.

Question

Under the Companies and Allied Matters Act 2004, the name of a private company limited by shares shall end with the word:
A. Registered
B. Limited
C. Incorporated
D. Corporation
E. Cooperative

Answer

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Tags: CAMA, Company Law, Legal Requirements, Private Company
Level: Level 1

Topic: Company Law
Series: MAR/JULY 2020

AAA – Nov 2012 – L3 – AII – Q7 – Regulatory Framework and Professional Standards

Defines the role of a chartered accountant reporting under CAMA and NSE listing requirements.

Question

Answer

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Tags: CAMA, Chartered Accountant, Nigerian Stock Exchange, Public Practice, Reporting Requirements
Level: Level 3

Topic: Regulatory Framework and Professional Standards
Series: NOV 2012

AAA – Nov 2011 – L3 – SB – Q3 – Audit of Corporate Governance

Key objectives and structures within corporate governance, focusing on the audit committee's role and board actions affecting governance.

Question

(a) Outline the main objective of corporate governance.
(3 Marks)

(c) State SIX instances when the corporate governance of a public company may be compromised by the Board of Directors.
(6 Marks)

Answer

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Tags: Audit Committee, Board of Directors, CAMA, Corporate Accountability, Corporate Governance, Governance Standards
Level: Level 3

Topic: Audit of Corporate Governance
Series: NOV 2011

AA – May 2023 – L2 – SA – Q4 – Ethical Issues in Auditing

Identify threats to auditor independence, assess circumstances affecting independence, and suggest safeguards.

Question

Cringe Professional Services has been auditing Kogberegbe Limited for about 20 years. Being a limited liability company, no regulation imposed restriction on the tenure of the auditors.

The company accrued for a NGN70.60m benefit from a transaction in 2019 from operating fees. This has been treated as income in the financial statements.

There were identified defaults by the company in relation to the payment of interests and principal on its outstanding loans and borrowings.

There were adverse ratios in the company’s financial performance ratios in the year due to interest on borrowings from financial institutions and related parties.

A revisit of the operating performance for the year revealed the following:

The entity made an operating loss of N1.22 billion.
It generated negative operating cashflows of N2.15 billion.
There was positive working capital as the current assets exceeded the current liabilities by N1.2 billion in the year.
The net assets position of the company was in the negative as the total liabilities exceeded the total assets by N9.8 billion.

The Financial Reporting Council concluded that there were threats to the auditors’ independence, hence the professional firm was penalized for that.

A concerned staff of the company asks you of the implications of the issues raised by the Financial Reporting Council.

Required:

a. Identify and explain the threats to independence of the auditor in the above scenario. (7 Marks)

b. Discuss circumstances that could give rise to threats to independence. (7 Marks)

c. Suggest appropriate safeguards which could be put in place to mitigate the identified threats. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Auditor Independence, CAMA, Conflict of Interest, Ethical Safeguards, FRC, ISA Compliance
Level: Level 2

Topic: Ethical Issues in Auditing
Series: MAY 2023

AA – May 2023 – L2 – SA – Q2 – The Role and Responsibilities of Auditors

Outline audit report matters per CAMA, auditor’s rights, and management's financial responsibilities.

Question

Required:

a. Explain the matters to be stated in an audit report according to Companies and Allied Matters Act (CAMA) 2020. (5 Marks)

b. State the auditor’s rights under Companies and Allied Matters Act (CAMA). (5 Marks)

c. State the duties of external auditors under Companies and Allied Matters Act (CAMA). (5 Marks)

d. What are the responsibilities of management and those charged with governance in relation to the accounting function of the company? (5 Marks)

Answer

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Tags: Audit Compliance, Auditor's Report, Auditor's Rights, CAMA, ISA 200, Management Responsibility
Level: Level 2

Topic: The Role and Responsibilities of Auditors
Series: MAY 2023

FR – May 2024 – L2 – SA – Q2 – Conceptual Framework for Financial Reporting

Discusses the information needs of financial statement users, CAMA director report requirements, and deferred tax calculations.

Question

Required:
Identify and discuss the information needs of the different users of financial statements. (10 Marks)

b. The Companies and Allied Matters Act (CAMA) 2020 is the primary source of company law that establishes the requirements for financial reporting by all companies in Nigeria.

Required:
Briefly explain FIVE issues that must be contained in a directors’ report in accordance with CAMA 2020. (5 Marks)

Answer

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Tags: CAMA, Conceptual Framework, Deferred Tax, Financial Reporting, Statement of Financial Position, Tax computation, User Needs
Level: Level 2

Topic: Conceptual Framework for Financial Reporting
Series: MAY 2023

AA – Nov 2016 – L2 – Q5 – Audit of Financial Statements

This question covers the definition of an audit, the overall objectives of an independent auditor, and the rights of auditors as per Nigerian law.

Question

Required:

a) Explain the term “Audit of the financial statement”.
(4 Marks)

b) Describe the overall objectives of the independent auditor in conducting the audit of financial statements in accordance with NSA 1 and ISA 200.
(6 Marks)

Answer

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Tags: Audit of Financial Statements, Auditor's Rights, CAMA, ISA 200, NSA 1
Level: Level 2

Topic: Audit of Financial Statements
Series: NOV 2016

BL – Nov 2015 – L2 – SB – Q2a – Company Law

List and explain four documents required for the incorporation of a company.

Question

Any two or more persons may form and incorporate a company by complying with the requirements of the Companies and Allied Matters Act.

Required:

Briefly explain FOUR documents required to be filed with the Corporate Affairs Commission for the incorporation of a company.
(10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: CAMA, Company Documents, Company Incorporation, Corporate Affairs Commission
Level: Level 1

Topic: Company Law
Series: NOV 2015

FA – May 2014 – L1 – SA – Q1 – Regulatory Environment of Accounting

Identifies where statutory books and records should be kept according to CAMA.

Question

The Companies and Allied Matters Act, CAP C20 LFN 2004 requires that the statutory books and records of a company be kept at …………………………………

Answer

Find Related Questions by Tags, levels, etc.

Tags: CAMA, Regulatory Compliance, Statutory Records
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2014

BL – Nov 2021 – L1 – SB – Q1 – Nigerian Legal System

Defining Nigerian legal terms and advising on audit obligations for a limited liability partnership under CAMA 2020.

Question

a. Nigerian courts are enjoined to apply the common law of England, doctrines of equity, and statutes of general application that were in force on the 1st of January 1900.

Required:

Define:
i. Common law (1 Mark)
ii. Equity (1 Mark)
iii. Statutes of general application (1 Mark)

Required:
Advise the partners in line with the provisions of the Companies and Allied Matters Act 2020 on:

c. A limited liability partnership must have a designated partner.

Required:
What shall a designated partner be responsible for? (4 Marks)

d. ADR is the abbreviation for Alternative Dispute Resolution.

Required:

i. Explain briefly Alternative Dispute Resolution (2 Marks)
ii. State THREE mechanisms of Alternative Dispute Resolution (3 Marks)

Answer

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Tags: CAMA, Common Law, Corporate Governance, Equity, Nigerian Courts
Level: Level 1

Topic: Nigerian Legal System
Series: NOV 2021

BL – MarJul 2020 – L1 – SA – Q4 – Company Law

Question testing knowledge on the requirement for naming a private company under the Companies and Allied Matters Act 2004.

Question

Under the Companies and Allied Matters Act 2004, the name of a private company limited by shares shall end with the word:
A. Registered
B. Limited
C. Incorporated
D. Corporation
E. Cooperative

Answer

Find Related Questions by Tags, levels, etc.

Tags: CAMA, Company Law, Legal Requirements, Private Company
Level: Level 1

Topic: Company Law
Series: MAR/JULY 2020

Question Tag: CAMA

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AAA – Nov 2012 – L3 – AII – Q7 – Regulatory Framework and Professional Standards

Defines the role of a chartered accountant reporting under CAMA and NSE listing requirements.

You're reporting an error for "AAA – Nov 2012 – L3 – AII – Q7 – Regulatory Framework and Professional Standards"

AAA – Nov 2011 – L3 – SB – Q3 – Audit of Corporate Governance

Key objectives and structures within corporate governance, focusing on the audit committee's role and board actions affecting governance.

You're reporting an error for "AAA – Nov 2011 – L3 – SB – Q3 – Audit of Corporate Governance"

AA – May 2023 – L2 – SA – Q4 – Ethical Issues in Auditing

Identify threats to auditor independence, assess circumstances affecting independence, and suggest safeguards.

You're reporting an error for "AA – May 2023 – L2 – SA – Q4 – Ethical Issues in Auditing"

AA – May 2023 – L2 – SA – Q2 – The Role and Responsibilities of Auditors

Outline audit report matters per CAMA, auditor’s rights, and management's financial responsibilities.

You're reporting an error for "AA – May 2023 – L2 – SA – Q2 – The Role and Responsibilities of Auditors"

FR – May 2024 – L2 – SA – Q2 – Conceptual Framework for Financial Reporting

Discusses the information needs of financial statement users, CAMA director report requirements, and deferred tax calculations.

You're reporting an error for "FR – May 2024 – L2 – SA – Q2 – Conceptual Framework for Financial Reporting"

AA – Nov 2016 – L2 – Q5 – Audit of Financial Statements

This question covers the definition of an audit, the overall objectives of an independent auditor, and the rights of auditors as per Nigerian law.

You're reporting an error for "AA – Nov 2016 – L2 – Q5 – Audit of Financial Statements"

BL – Nov 2015 – L2 – SB – Q2a – Company Law

List and explain four documents required for the incorporation of a company.

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FA – May 2014 – L1 – SA – Q1 – Regulatory Environment of Accounting

Identifies where statutory books and records should be kept according to CAMA.

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BL – Nov 2021 – L1 – SB – Q1 – Nigerian Legal System

Defining Nigerian legal terms and advising on audit obligations for a limited liability partnership under CAMA 2020.

You're reporting an error for "BL – Nov 2021 – L1 – SB – Q1 – Nigerian Legal System"

BL – MarJul 2020 – L1 – SA – Q4 – Company Law

Question testing knowledge on the requirement for naming a private company under the Companies and Allied Matters Act 2004.

You're reporting an error for "BL – MarJul 2020 – L1 – SA – Q4 – Company Law"

AAA – Nov 2012 – L3 – AII – Q7 – Regulatory Framework and Professional Standards

Defines the role of a chartered accountant reporting under CAMA and NSE listing requirements.

You're reporting an error for "AAA – Nov 2012 – L3 – AII – Q7 – Regulatory Framework and Professional Standards"

AAA – Nov 2011 – L3 – SB – Q3 – Audit of Corporate Governance

Key objectives and structures within corporate governance, focusing on the audit committee's role and board actions affecting governance.

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AA – May 2023 – L2 – SA – Q4 – Ethical Issues in Auditing

Identify threats to auditor independence, assess circumstances affecting independence, and suggest safeguards.

You're reporting an error for "AA – May 2023 – L2 – SA – Q4 – Ethical Issues in Auditing"

AA – May 2023 – L2 – SA – Q2 – The Role and Responsibilities of Auditors

Outline audit report matters per CAMA, auditor’s rights, and management's financial responsibilities.

You're reporting an error for "AA – May 2023 – L2 – SA – Q2 – The Role and Responsibilities of Auditors"

FR – May 2024 – L2 – SA – Q2 – Conceptual Framework for Financial Reporting

Discusses the information needs of financial statement users, CAMA director report requirements, and deferred tax calculations.

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AA – Nov 2016 – L2 – Q5 – Audit of Financial Statements

This question covers the definition of an audit, the overall objectives of an independent auditor, and the rights of auditors as per Nigerian law.

You're reporting an error for "AA – Nov 2016 – L2 – Q5 – Audit of Financial Statements"

BL – Nov 2015 – L2 – SB – Q2a – Company Law

List and explain four documents required for the incorporation of a company.

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FA – May 2014 – L1 – SA – Q1 – Regulatory Environment of Accounting

Identifies where statutory books and records should be kept according to CAMA.

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BL – Nov 2021 – L1 – SB – Q1 – Nigerian Legal System

Defining Nigerian legal terms and advising on audit obligations for a limited liability partnership under CAMA 2020.

You're reporting an error for "BL – Nov 2021 – L1 – SB – Q1 – Nigerian Legal System"

BL – MarJul 2020 – L1 – SA – Q4 – Company Law

Question testing knowledge on the requirement for naming a private company under the Companies and Allied Matters Act 2004.

You're reporting an error for "BL – MarJul 2020 – L1 – SA – Q4 – Company Law"

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