ISA 265 – NBC Institute

AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

Question

Eat Well Bakeries is a private limited liability company. It bakes bread and other confectioneries, produced from the main bakery and a smaller bakery in another part of town. Products are sold from these two bakeries and five additional outlets in the same town. Distributors purchase products outright and bear the risk of sale.

The main administrative and management functions of the bakeries are conducted from the main bakery, while basic records are kept at the small bakery and sales outlets. These records are transmitted to the main office every morning. Detailed accounting records and performance analysis are handled in the main administrative office.

Despite being a private business, the chairman insists on maintaining proper standards to stay competitive. The chairman transferred the company’s audit to your firm after a discussion with your partner, and professional clearance was obtained. However, limited documentation from the predecessor auditor was available, and no extensive documentation was done at the beginning of the audit.

You have been assigned to continue the audit from where it was left off, ensuring the chairman’s expectations are met.

Required:

a. Evaluate the Auditor’s objective concerning ISA 250 that would be discussed with the chairman. (5 Marks)

b. Prepare an outline of matters that should be communicated. (5 Marks)

c. Your review shows internal control challenges. Based on this, prepare a brief on:

i. The meaning of deficiency as per ISA 265 (3 Marks)
ii. The components to be included in communication to the chairman regarding deficiencies (5 Marks)

d. Evaluate potential audit strategies, and recommend an appropriate model for application to Eat Well Bakeries. (12 Marks)

Answer

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Tags: Audit Objectives, Audit strategy, Communication with Governance, Deficiency Reporting, Internal Control, ISA 250, ISA 265, Risk Assessment
Level: Level 3

Topic: Overview of Advanced Audit and Assurance

AA – Nov 2016 – L2 – Q5a – Completion Procedures and Reporting

Explain what a management letter is and describe its contents.

Question

ISA 265 “Communicating Deficiencies in Internal Control to Those Charged with Governance and Management” requires auditors to communicate deficiencies in internal control with management.

Required:
Explain clearly what a management letter is, indicating the contents of such a letter. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Internal Control, ISA 265, Management letter
Level: Level 2

Topic: Completion Procedures and Reporting
Series: NOV 2016

AA – May 2020 – L2 – Q5b – Regulatory Framework and Audit Responsibilities

Outline the procedures for communicating deficiencies in internal controls to those charged with governance.

Question

You have completed the audit of ABC Ltd for the year ended October 31, 2019.

Required:
i) Outline the procedures for communicating deficiencies in internal controls to those charged with governance and management. (6 marks)

ii) Illustrate how the deficiencies are reported. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Communication, Deficiency Reporting, Internal Controls, ISA 265
Level: Level 2

Topic: Regulatory Framework and Audit Responsibilities
Series: MAY 2020

AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

Question

You have been assigned to continue the audit from where it was left off, ensuring the chairman’s expectations are met.

Required:

a. Evaluate the Auditor’s objective concerning ISA 250 that would be discussed with the chairman. (5 Marks)

b. Prepare an outline of matters that should be communicated. (5 Marks)

c. Your review shows internal control challenges. Based on this, prepare a brief on:

i. The meaning of deficiency as per ISA 265 (3 Marks)
ii. The components to be included in communication to the chairman regarding deficiencies (5 Marks)

d. Evaluate potential audit strategies, and recommend an appropriate model for application to Eat Well Bakeries. (12 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Objectives, Audit strategy, Communication with Governance, Deficiency Reporting, Internal Control, ISA 250, ISA 265, Risk Assessment
Level: Level 3

Topic: Overview of Advanced Audit and Assurance

AA – Nov 2016 – L2 – Q5a – Completion Procedures and Reporting

Explain what a management letter is and describe its contents.

Question

ISA 265 “Communicating Deficiencies in Internal Control to Those Charged with Governance and Management” requires auditors to communicate deficiencies in internal control with management.

Required:
Explain clearly what a management letter is, indicating the contents of such a letter. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Internal Control, ISA 265, Management letter
Level: Level 2

Topic: Completion Procedures and Reporting
Series: NOV 2016

AA – May 2020 – L2 – Q5b – Regulatory Framework and Audit Responsibilities

Outline the procedures for communicating deficiencies in internal controls to those charged with governance.

Question

You have completed the audit of ABC Ltd for the year ended October 31, 2019.

Required:
i) Outline the procedures for communicating deficiencies in internal controls to those charged with governance and management. (6 marks)

ii) Illustrate how the deficiencies are reported. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Communication, Deficiency Reporting, Internal Controls, ISA 265
Level: Level 2

Topic: Regulatory Framework and Audit Responsibilities
Series: MAY 2020

Question Tag: ISA 265

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AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

AA – Nov 2016 – L2 – Q5a – Completion Procedures and Reporting

Explain what a management letter is and describe its contents.

AA – May 2020 – L2 – Q5b – Regulatory Framework and Audit Responsibilities

Outline the procedures for communicating deficiencies in internal controls to those charged with governance.

AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

AA – Nov 2016 – L2 – Q5a – Completion Procedures and Reporting

Explain what a management letter is and describe its contents.

AA – May 2020 – L2 – Q5b – Regulatory Framework and Audit Responsibilities

Outline the procedures for communicating deficiencies in internal controls to those charged with governance.

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AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

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AA – Nov 2016 – L2 – Q5a – Completion Procedures and Reporting

Explain what a management letter is and describe its contents.

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AA – May 2020 – L2 – Q5b – Regulatory Framework and Audit Responsibilities

Outline the procedures for communicating deficiencies in internal controls to those charged with governance.

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AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance

Evaluate auditor's objectives under ISA 250, internal control deficiencies, and communication requirements for audit strategy.

You're reporting an error for "AAA – Nov 2021 – L3 – Q1 – Overview of Advanced Audit and Assurance"

AA – Nov 2016 – L2 – Q5a – Completion Procedures and Reporting

Explain what a management letter is and describe its contents.

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AA – May 2020 – L2 – Q5b – Regulatory Framework and Audit Responsibilities

Outline the procedures for communicating deficiencies in internal controls to those charged with governance.

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