ISA 315 – NBC Institute

AAA – Nov 2021 – L3 – Q7 – Audit of IT Systems and Data Analytics

Discuss control environment requirements of ISA 315 and evaluate control activities for Egunje Distributors Ltd.

Question

Egunje Distributors Limited is a private company in which Chief Idowu is the major shareholder. Chief Idowu set up the business to help provide resources for his philanthropic gestures. He has been involved in the major control activities, and the business was achieving its purpose, and things were working well.

After a number of years, Chief Idowu stepped aside from the business and handed over effective management to one of his subordinates, whom he elevated to the rank of General Manager (GM). The GM followed Chief Idowu’s control processes for only one year and then introduced new ideas and processes, resulting in undue amounts being transferred into his private accounts rather than the company’s accounts. This has affected the results of the company.

While Chief Idowu has not decided to take any hasty action, he has decided to bring in your firm, due to its size, so that through your work, he may understand the reasons for the dwindling performance. It has been discussed and agreed that your report on the audit will provide insight into the reasons for the observed decline in performance.

Required:

a. Discuss the control environment, focusing on the requirements of ISA 315 – Identifying and assessing the risk of material misstatement through understanding the entity and its environment, that will be relevant to this situation. (9 Marks)

b. Evaluate the control activities that will require your attention. (6 Marks)

Answer

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Tags: Audit Planning, Control Activities, Control Environment, Internal Controls, ISA 315, Risk of Misstatement
Level: Level 3

Topic: Audit of IT Systems and Data Analytics

AA – Nov 2018 – L2 – Q4a and Q4b – Risk Assessment and Internal Control

Describes factors for obtaining entity and environmental information for risk assessment and procedures to perform risk assessment.

Question

The independent auditor identifies and assesses the risk of material misstatements through understanding the entity and its environment.

Required:
a. Describe the factors the auditor should consider while obtaining information on the entity and its environment.
(10 Marks)

b. Explain why the auditor needs to perform risk assessment and the procedures.
(5 Marks)

Answer

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Tags: Audit Planning, ISA 315, Risk Assessment Procedures, Risk of Material Misstatement
Level: Level 2

Topic: Risk Assessment and Internal Control
Series: NOV 2018

AA – Nov 2018 – L2 – Q1a – Internal Control Systems

Explain control environment and control procedures and discuss the five elements of internal control as per ISA 315.

Question

Auditors are required by International Standards on Auditing (ISA) to understand and assess a client’s system of internal control. Consequently, auditors must use their judgment to determine whether to test all or part of the internal control system as part of their response to the assessed risk of material misstatement in the financial statements to be audited.

Required:
i. Explain the following terms:

Control environment
Control procedures
(5 Marks)

ii. State and explain the five elements of internal control as identified by ISA 315.
(5 Marks)

Answer

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Tags: Control Environment, Control Procedures, Internal Control, ISA 315, Risk Assessment
Level: Level 2

Topic: Internal Control Systems
Series: NOV 2018

AA – Mar 2023 – L2 – Q5a – Audit and Assurance Risk Environment

Identify and explain the components of an entity’s internal control system.

Question

ISA 315 (Revised): Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment requires auditors to understand the entity’s internal control. An entity’s internal control is made up of several components.

Required:
In reference to the statement above, state the FIVE (5) components of an entity’s internal control and give a brief explanation of each component.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Control Environment, Entity’s Risk Assessment, Internal Control, ISA 315
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: MAR 2023

AA – Nov 2020 – L2 – Q2a – Audit and Assurance Risk Environment

Discuss procedures to obtain understanding of an entity for a first-time audit.

Question

ISA 315: Identifying and assessing risks of material misstatement through understanding the entity and its environment requires auditors to assess the risks of material misstatement of the financial statements, whether due to fraud or error, through obtaining an understanding of the entity and its environment, including internal controls, in order to be able to design and perform further audit procedures.

Required:
Discuss FOUR (4) procedures that should be carried out to obtain an understanding of an entity in the conduct of a first-time audit.
(6 marks)

Answer

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Tags: Audit Procedures, Entity Environment, Internal Controls, ISA 315, Risk Assessment
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

AA – May 2021 – L2 – Q1b – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

Identify sources for audit knowledge and explain components of internal control and risk-based auditing.

Question

To prepare an audit strategy and an audit plan, the Auditor will need to gain an understanding of the entity and its environment in accordance with ISA 315 “Identifying and assessing the risk and material misstatement through understanding the entity and its environment”.

Required:
i) State FIVE (5) sources from which the Auditor can obtain knowledge of the industry and the organisation.

(5 marks)

ii) Identify FIVE (5) components that together make up internal controls. (5 marks)

iii) Define the concept of risk-based auditing. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit strategy, Internal Controls, ISA 315, Risk Assessment, Risk-based Auditing
Level: Level 2

Topic: Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements
Series: MAY 2021

AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence

Explains the components of internal control per ISA 315 and reasons for focusing on internal controls during substantive testing.

Question

b) For many firms, the audit evidence that they obtain does not focus on a client’s internal systems and controls; rather, the work is focused on the substantive testing of the transactions and balances which make up the entity’s accounts. Consequently, many practitioners do not believe that they are required to spend much time documenting a client’s internal systems and controls or indeed to test whether any of the controls actually operate in practice in any detail. However, to ignore this area will mean that the requirements of ISA 315: Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and its Environment are not complied with.

Required:
i) Explain the components of an internal control system in line with ISA 315.
(5 marks)
ii) Why is the work on internal controls necessary when auditors take the substantive approach?
(4 marks)

iii) Why is the work on internal controls necessary when auditors take the substantive approach?
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Internal Control Components, ISA 315, Substantive Testing
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2019

AAA – Nov 2021 – L3 – Q7 – Audit of IT Systems and Data Analytics

Discuss control environment requirements of ISA 315 and evaluate control activities for Egunje Distributors Ltd.

Question

Required:

b. Evaluate the control activities that will require your attention. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, Control Activities, Control Environment, Internal Controls, ISA 315, Risk of Misstatement
Level: Level 3

Topic: Audit of IT Systems and Data Analytics

AA – Nov 2018 – L2 – Q4a and Q4b – Risk Assessment and Internal Control

Describes factors for obtaining entity and environmental information for risk assessment and procedures to perform risk assessment.

Question

The independent auditor identifies and assesses the risk of material misstatements through understanding the entity and its environment.

Required:
a. Describe the factors the auditor should consider while obtaining information on the entity and its environment.
(10 Marks)

b. Explain why the auditor needs to perform risk assessment and the procedures.
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Planning, ISA 315, Risk Assessment Procedures, Risk of Material Misstatement
Level: Level 2

Topic: Risk Assessment and Internal Control
Series: NOV 2018

AA – Nov 2018 – L2 – Q1a – Internal Control Systems

Explain control environment and control procedures and discuss the five elements of internal control as per ISA 315.

Question

Required:
i. Explain the following terms:

Control environment
Control procedures
(5 Marks)

ii. State and explain the five elements of internal control as identified by ISA 315.
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Control Environment, Control Procedures, Internal Control, ISA 315, Risk Assessment
Level: Level 2

Topic: Internal Control Systems
Series: NOV 2018

AA – Mar 2023 – L2 – Q5a – Audit and Assurance Risk Environment

Identify and explain the components of an entity’s internal control system.

Question

Required:
In reference to the statement above, state the FIVE (5) components of an entity’s internal control and give a brief explanation of each component.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Control Environment, Entity’s Risk Assessment, Internal Control, ISA 315
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: MAR 2023

AA – Nov 2020 – L2 – Q2a – Audit and Assurance Risk Environment

Discuss procedures to obtain understanding of an entity for a first-time audit.

Question

Required:
Discuss FOUR (4) procedures that should be carried out to obtain an understanding of an entity in the conduct of a first-time audit.
(6 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Entity Environment, Internal Controls, ISA 315, Risk Assessment
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2016

AA – May 2021 – L2 – Q1b – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

Identify sources for audit knowledge and explain components of internal control and risk-based auditing.

Question

Required:
i) State FIVE (5) sources from which the Auditor can obtain knowledge of the industry and the organisation.

(5 marks)

ii) Identify FIVE (5) components that together make up internal controls. (5 marks)

iii) Define the concept of risk-based auditing. (3 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit strategy, Internal Controls, ISA 315, Risk Assessment, Risk-based Auditing
Level: Level 2

Topic: Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements
Series: MAY 2021

AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence

Explains the components of internal control per ISA 315 and reasons for focusing on internal controls during substantive testing.

Question

iii) Why is the work on internal controls necessary when auditors take the substantive approach?
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit evidence, Internal Control Components, ISA 315, Substantive Testing
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2019

Question Tag: ISA 315

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AAA – Nov 2021 – L3 – Q7 – Audit of IT Systems and Data Analytics

Discuss control environment requirements of ISA 315 and evaluate control activities for Egunje Distributors Ltd.

AA – Nov 2018 – L2 – Q4a and Q4b – Risk Assessment and Internal Control

Describes factors for obtaining entity and environmental information for risk assessment and procedures to perform risk assessment.

AA – Nov 2018 – L2 – Q1a – Internal Control Systems

Explain control environment and control procedures and discuss the five elements of internal control as per ISA 315.

AA – Mar 2023 – L2 – Q5a – Audit and Assurance Risk Environment

Identify and explain the components of an entity’s internal control system.

AA – Nov 2020 – L2 – Q2a – Audit and Assurance Risk Environment

Discuss procedures to obtain understanding of an entity for a first-time audit.

AA – May 2021 – L2 – Q1b – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

Identify sources for audit knowledge and explain components of internal control and risk-based auditing.

AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence

Explains the components of internal control per ISA 315 and reasons for focusing on internal controls during substantive testing.

AAA – Nov 2021 – L3 – Q7 – Audit of IT Systems and Data Analytics

Discuss control environment requirements of ISA 315 and evaluate control activities for Egunje Distributors Ltd.

AA – Nov 2018 – L2 – Q4a and Q4b – Risk Assessment and Internal Control

Describes factors for obtaining entity and environmental information for risk assessment and procedures to perform risk assessment.

AA – Nov 2018 – L2 – Q1a – Internal Control Systems

Explain control environment and control procedures and discuss the five elements of internal control as per ISA 315.

AA – Mar 2023 – L2 – Q5a – Audit and Assurance Risk Environment

Identify and explain the components of an entity’s internal control system.

AA – Nov 2020 – L2 – Q2a – Audit and Assurance Risk Environment

Discuss procedures to obtain understanding of an entity for a first-time audit.

AA – May 2021 – L2 – Q1b – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

Identify sources for audit knowledge and explain components of internal control and risk-based auditing.

AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence

Explains the components of internal control per ISA 315 and reasons for focusing on internal controls during substantive testing.

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Question Tag: ISA 315

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AAA – Nov 2021 – L3 – Q7 – Audit of IT Systems and Data Analytics

Discuss control environment requirements of ISA 315 and evaluate control activities for Egunje Distributors Ltd.

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AA – Nov 2018 – L2 – Q4a and Q4b – Risk Assessment and Internal Control

Describes factors for obtaining entity and environmental information for risk assessment and procedures to perform risk assessment.

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AA – Nov 2018 – L2 – Q1a – Internal Control Systems

Explain control environment and control procedures and discuss the five elements of internal control as per ISA 315.

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AA – Mar 2023 – L2 – Q5a – Audit and Assurance Risk Environment

Identify and explain the components of an entity’s internal control system.

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AA – Nov 2020 – L2 – Q2a – Audit and Assurance Risk Environment

Discuss procedures to obtain understanding of an entity for a first-time audit.

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AA – May 2021 – L2 – Q1b – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

Identify sources for audit knowledge and explain components of internal control and risk-based auditing.

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AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence

Explains the components of internal control per ISA 315 and reasons for focusing on internal controls during substantive testing.

You're reporting an error for "AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence"

AAA – Nov 2021 – L3 – Q7 – Audit of IT Systems and Data Analytics

Discuss control environment requirements of ISA 315 and evaluate control activities for Egunje Distributors Ltd.

You're reporting an error for "AAA – Nov 2021 – L3 – Q7 – Audit of IT Systems and Data Analytics"

AA – Nov 2018 – L2 – Q4a and Q4b – Risk Assessment and Internal Control

Describes factors for obtaining entity and environmental information for risk assessment and procedures to perform risk assessment.

You're reporting an error for "AA – Nov 2018 – L2 – Q4a and Q4b – Risk Assessment and Internal Control"

AA – Nov 2018 – L2 – Q1a – Internal Control Systems

Explain control environment and control procedures and discuss the five elements of internal control as per ISA 315.

You're reporting an error for "AA – Nov 2018 – L2 – Q1a – Internal Control Systems"

AA – Mar 2023 – L2 – Q5a – Audit and Assurance Risk Environment

Identify and explain the components of an entity’s internal control system.

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AA – Nov 2020 – L2 – Q2a – Audit and Assurance Risk Environment

Discuss procedures to obtain understanding of an entity for a first-time audit.

You're reporting an error for "AA – Nov 2020 – L2 – Q2a – Audit and Assurance Risk Environment"

AA – May 2021 – L2 – Q1b – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements

Identify sources for audit knowledge and explain components of internal control and risk-based auditing.

You're reporting an error for "AA – May 2021 – L2 – Q1b – Audit and Assurance Risk Environment, Planning and Approach for Audit and Assurance Engagements"

AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence

Explains the components of internal control per ISA 315 and reasons for focusing on internal controls during substantive testing.

You're reporting an error for "AA – May 2019 – L2 – Q2b – Audit and Assurance Evidence"

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