External Auditors – NBC Institute

AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd

Explanation of internal control, objectives, features, and responsibilities of management, board, and auditors.

Question

Big Man Nigeria Limited is registered with the Corporate Affairs Commission. The services to be rendered are awaiting regulatory approval. Pending that approval, directors of the company have been funding the operations of the company through the parent company for the past four years. However, the newly appointed chairman of the company’s board of directors believes there is the need to organize the company strategically so as to make it more attractive to investors.

Your father’s friend, Mr. Ado, has been appointed as the Managing Director of the company, and he is interested in appointing an accountant to keep the books of accounts of the company. The present financial operation of the company does not show a good internal control structure. Added to this, Ado is thinking of recommending to the board of directors the need to appoint an external auditor.

The Managing Director, who is not an accountant, has requested for your advice on the need for an adequate internal control system in a company.
Explain to Mr. Ado, the following:
a. Meaning of internal control. (4 Marks)
b. Objectives of internal control. (6 Marks)
c. Features of a good internal control system. (4 Marks)
d. Regarding internal control, the responsibilities of:
i. Management; (2 Marks)
ii. Board of Directors; and (2 Marks)
iii. External auditors. (2 Marks)
(Total 20 Marks)

Answer

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Tags: Board of Directors, External Auditors, Internal Control, Management
Level: Level 2

Topic: Internal Control Systems
Series: MAR/JULY 2020

FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting

Differences between financial accounts and management accounts

Question

Which of the following sentences does NOT explain the distinction between financial accounts and management accounts?
A. Financial accounts are primarily for external users and management accounts are primarily for internal users
B. Financial accounts are normally prepared annually while management accounts are prepared monthly
C. Financial accounts are more accurate than management accounts
D. Financial accounts are audited by external auditors whereas management accounts are audited by internal auditors
E. Unlike financial accounts, management accounts are used for rendering returns to tax authorities

Answer

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Tags: External Auditors, Financial Accounts, Management Accounts
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAR/JULY 2020

AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship

Discuss the benefits of forming an audit committee for Ebaatsake Ltd based on issues raised in a scenario.

Question

Ebaatsake Ltd designs and manufactures luxury motor vehicles. The company employs 2,500 staff and consistently makes a net profit of between 10% and 15% of sales. Ebaatsake Ltd is not listed; its shares are held by 15 individuals, most of them from the same family. The maximum shareholding is 15% of the share capital.

The executive directors are drawn mainly from the shareholders. There are no non-executive directors because the company legislation in Ebaatsake Ltd’s jurisdiction does not require any. The executive directors are very successful in running Ebaatsake Ltd, partly from their training in production and management techniques, and partly from their hands-on approach providing motivation to employees.

The board is considering a significant expansion of the company. However, the company’s bankers are concerned with the standard of financial reporting as the Finance Director (FD) has recently left Ebaatsake Ltd. The board is delaying provision of additional financial information until a new FD is appointed.

Although Ebaatsake Ltd does have an internal audit department, the Chief Internal Auditor frequently complains that the board of Ebaatsake Ltd does not understand his reports nor provide sufficient support for his department and the internal control systems within Ebaatsake Ltd. The board of Ebaatsake Ltd concurs with this view. Adoko & Co, the external auditors, have also expressed concern in this area and the fact that the internal audit department focuses work on control systems, not financial reporting. Adoko & Co are appointed by and report to the board of Ebaatsake Ltd.

The board of Ebaatsake Ltd is considering a proposal from the Chief Internal Auditor to establish an audit committee. The committee would consist of one executive director, the chief internal auditor as well as three new appointees. One appointee would have a non-executive seat on the board of directors.

Required:
Discuss how the formation of an audit committee could address the issues raised in the above scenario.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Committees, Board of Directors, Corporate Governance, External Auditors, Financial Reporting, Internal Audit
Level: Level 2

Topic: Internal Audit and External Audit Relationship
Series: NOV 2017

AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit

Describes the five key roles external auditors play in corporate governance to ensure the transparency and reliability of financial statements.

Question

External Auditors play a key role in the corporate governance framework. They conduct one of the most important corporate governance checks that help to monitor management’s activities. The audit of financial statements makes disclosures more reliable, thus increasing confidence in the company’s transparency.

Required:
Explain FIVE (5) roles that External Auditors play in Corporate Governance.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Role, Corporate Governance, External Auditors, Financial Statements, Governance, ISA, Management
Level: Level 2

Topic: Internal Audit and Its Relationship with External Audit
Series: DEC 2022

AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit

Compare and contrast the roles of internal and external auditors.

Question

Compare and contrast the role of internal auditors and external auditors. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comparison, External Auditors, Internal Auditors
Level: Level 2

Topic: Internal Audit and Its Relationship with External Audit
Series: NOV 2016

AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd

Explanation of internal control, objectives, features, and responsibilities of management, board, and auditors.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Board of Directors, External Auditors, Internal Control, Management
Level: Level 2

Topic: Internal Control Systems
Series: MAR/JULY 2020

FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting

Differences between financial accounts and management accounts

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: External Auditors, Financial Accounts, Management Accounts
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAR/JULY 2020

AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship

Discuss the benefits of forming an audit committee for Ebaatsake Ltd based on issues raised in a scenario.

Question

Required:
Discuss how the formation of an audit committee could address the issues raised in the above scenario.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Committees, Board of Directors, Corporate Governance, External Auditors, Financial Reporting, Internal Audit
Level: Level 2

Topic: Internal Audit and External Audit Relationship
Series: NOV 2017

AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit

Describes the five key roles external auditors play in corporate governance to ensure the transparency and reliability of financial statements.

Question

Required:
Explain FIVE (5) roles that External Auditors play in Corporate Governance.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Role, Corporate Governance, External Auditors, Financial Statements, Governance, ISA, Management
Level: Level 2

Topic: Internal Audit and Its Relationship with External Audit
Series: DEC 2022

AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit

Compare and contrast the roles of internal and external auditors.

Question

Compare and contrast the role of internal auditors and external auditors. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comparison, External Auditors, Internal Auditors
Level: Level 2

Topic: Internal Audit and Its Relationship with External Audit
Series: NOV 2016

Question Tag: External Auditors

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AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd

Explanation of internal control, objectives, features, and responsibilities of management, board, and auditors.

FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting

Differences between financial accounts and management accounts

AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship

Discuss the benefits of forming an audit committee for Ebaatsake Ltd based on issues raised in a scenario.

AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit

Describes the five key roles external auditors play in corporate governance to ensure the transparency and reliability of financial statements.

AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit

Compare and contrast the roles of internal and external auditors.

AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd

Explanation of internal control, objectives, features, and responsibilities of management, board, and auditors.

FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting

Differences between financial accounts and management accounts

AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship

Discuss the benefits of forming an audit committee for Ebaatsake Ltd based on issues raised in a scenario.

AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit

Describes the five key roles external auditors play in corporate governance to ensure the transparency and reliability of financial statements.

AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit

Compare and contrast the roles of internal and external auditors.

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Question Tag: External Auditors

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AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd

Explanation of internal control, objectives, features, and responsibilities of management, board, and auditors.

You're reporting an error for "AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd"

FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting

Differences between financial accounts and management accounts

You're reporting an error for "FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting"

AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship

Discuss the benefits of forming an audit committee for Ebaatsake Ltd based on issues raised in a scenario.

You're reporting an error for "AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship"

AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit

Describes the five key roles external auditors play in corporate governance to ensure the transparency and reliability of financial statements.

You're reporting an error for "AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit"

AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit

Compare and contrast the roles of internal and external auditors.

You're reporting an error for "AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit"

AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd

Explanation of internal control, objectives, features, and responsibilities of management, board, and auditors.

You're reporting an error for "AA – Mar/Jul 2020 – L2 – Q3 – Internal Control and Audit Importance for Big Man Nigeria Ltd"

FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting

Differences between financial accounts and management accounts

You're reporting an error for "FA – Mar/July 2020 – L1 – SA – Q8 – Regulatory Environment of Accounting"

AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship

Discuss the benefits of forming an audit committee for Ebaatsake Ltd based on issues raised in a scenario.

You're reporting an error for "AA – Nov 2017 – L2 – Q1a – nternal Audit and External Audit Relationship"

AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit

Describes the five key roles external auditors play in corporate governance to ensure the transparency and reliability of financial statements.

You're reporting an error for "AA – Dec 2022 – L2 – Q2a – Internal Audit and Its Relationship with External Audit"

AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit

Compare and contrast the roles of internal and external auditors.

You're reporting an error for "AA – Nov 2016 – L2 – Q2d – Internal Audit and Its Relationship with External Audit"

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