Verification – NBC Institute

BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

Question

A statement made by a party to a contract but with a request to the other party to verify the truth of the statement is:

A. Binding on the other party
B. A term of the contract
C. Not a term of the contract
D. A condition of the contract
E. A misrepresentation

Answer

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Tags: Contract Law, Misrepresentation, Verification
Level: Level 1

Topic: Law of Contract
Series: MAY 2013

FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Determines the document used to verify that ordered goods are supplied as per specifications.

Question

Which of the following is checked against a waybill to ensure that the goods ordered are the ones supplied?

A. Good received note
B. Purchase invoice
C. Purchase order
D. Store issue voucher
E. Delivery note

Answer

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Tags: Goods Received Note, Inventory, Verification, Waybill
Level: Level 1

AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence

Explanation of a contingent liability and audit procedures for its verification.

Question

At a meeting to discuss the draft accounts with senior management of Good Old Days Ltd, the external auditors, Gelian Chartered Accountants, asked management to confirm the amount of contingent liability of GH¢100 million in respect of a pending legal suit against the company. The CEO quizzed the chief accountant to explain how the amount of GH¢100 million was arrived at.

Required:
i) Describe briefly what a contingent liability is, giving examples where appropriate. (2 marks)
ii) Explain in detail the audit procedures for the verification of contingent liabilities. (5 marks)

Answer

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Tags: Audit Procedures, Contingent Liability, Legal claims, Verification
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2017

AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment

Describe how you would verify the patents appearing in the financial statements of Tamale Pharma.

Question

Tamale Pharma specializes in the development of drugs for the pharmaceutical industry.

Required:
i) State how you could verify the following item appearing in the statement of financial position of Tamale Pharma as at 31 December 2018:

Patents.
(3.5 marks)

ii) State how you could verify the following item appearing in the statement of financial position of Tamale Pharma as at 31 December 2018:

Research and development.
(3.5 marks)

Answer

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Tags: Audit Procedures, IAS 38, Intangible Assets, Research and Development, Verification
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: MAY 2020

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

Question

b. At a meeting to deliberate with management on the draft financial statement of E.T Company Ltd, the external auditors, Sampson Amarty and Co., a firm of Chartered Accountants, demanded that management should explain how an amount of GH¢200,000 for land and building in the financial statements had been arrived at. The Managing Director asked the Director of Finance to explain how the amount of GH¢200,000 was arrived at. The Director of Finance explained that the amount of GH¢200,000 was given to them by an external valuer, S.K. Valuation Experts.

Required:
Explain the audit procedures that would be adopted in verifying the land and building value in the financial statements. (7 marks)

Answer

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Tags: Audit Procedures, Financial Statements, Land and Building Valuation, Verification
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2018

AAA – May 2020 – Q2 – Assurance Services

Evaluate the risks, audit implications, and ethical considerations for accepting an engagement to provide assurance on EnvironmentalCare Ghana's Sustainability Report, focusing on environmental and social KPIs.

Question

You are a manager in Sustainability Ghana, an independent member of Sustainability International, a global firm of Chartered Certified Accountants. You are responsible for evaluating proposed engagements and for recommending to a team of partners whether or not an engagement should be accepted by your firm.

EnvironmentalCare Ghana, a listed company, is an existing audit client and is an international energy producing company, with a global network including 220 countries and 300,000 employees. The company offers electricity using renewable resources to individual and corporate customers, as well as storage and logistical services.

EnvironmentalCare Ghana takes its corporate social responsibility seriously, and publishes social and environmental key performance indicators (KPIs) in a Sustainability Report, which is published with the financial statements in the annual report. Partly in response to requests from shareholders and pressure groups, EnvironmentalCare Ghana’s management has decided that in the forthcoming annual report, the KPIs should be accompanied by an independent assurance report. An approach has been made to your firm to provide this report in addition to the audit.

To help in your evaluation of this potential engagement, you have been given an extract from the draft Sustainability Report, containing some of the KPIs published by EnvironmentalCare Ghana. In total, 25 environmental KPIs, and 50 social KPIs are disclosed.

Extract from Sustainability Report	Year ended 31 December 2018 Draft	Year ended 31 December 2017 Actual
CO2 emissions (million tonnes)	26.8	28.3
Energy use (million kilowatt hours)	4,895	5,250
Charitable donations (GH¢ million)	10.5	8.2
Number of serious accidents in the workplace	60	68
Average annual expenditure on training per employee	GH¢180	GH¢175

You have also had a meeting with Kofi Ghana, the manager responsible for the audit of EnvironmentalCare Ghana, and notes of the meeting are given below.

Notes from meeting with audit manager, Kofi Ghana

Sustainability Ghana has audited EnvironmentalCare Ghana for three years, and it is a major audit client of the firm, due to its global presence and recent listing on two major stock exchanges. The audit is managed from the Airport office, which is also the location of the global headquarters of EnvironmentalCare Ghana. The audit work is nearly complete, and the annual report is to be published in about four weeks, in time for the company’s meeting, scheduled for 31 January 2019.
No work has been done on the KPIs, other than review them for consistency, as we would with any ‘other information’ issued with the financial statements. The KPIs are produced by EnvironmentalCare Ghana’s Sustainability Department, located in Fartown. There has been no visit to EnvironmentalCare Ghana’s offices in Fartown as it is in a remote location overseas, and the department’s based there are not relevant to the audit.
Audit procedures were performed on the charitable donations, as disclosed in a note to the financial statements, and our evidence indicates that there have been donations of GH¢9 million this year, which is the amount disclosed in the note. However, the draft KPI has a different figure of GH¢10.5 million, and this is the figure highlighted in the draft Chairman’s Statement as well as the draft Sustainability Report. GH¢9 million is material to the financial statements.
Your firm has recently established a sustainability reporting assurance team based at the
Airport office and if the engagement to report on the Sustainability Report is accepted, it
would be performed by members of that team, who would not be involved with the audit.
Required:
a) Identify and explain the matters to be evaluated in making the acceptance decision to
perform an assurance engagement on the Sustainability Report of EnvironmentalCare
Ghana. (14 marks)
b) Recommend procedures that could be used to verify the following draft KPIs:
i) The number of serious accidents in the workplace; and (3 marks)
ii) The average annual expenditure on training per employee. (3 marks)
(Total: 20 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Acceptance Decision, Assurance Engagement, EnvironmentalCare Ghana, KPIs, Procedures, Sustainability Reporting, Verification
Level: Level 3

Topic: Assurance services
Series: MAY 2020

BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

Question

A statement made by a party to a contract but with a request to the other party to verify the truth of the statement is:

A. Binding on the other party
B. A term of the contract
C. Not a term of the contract
D. A condition of the contract
E. A misrepresentation

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contract Law, Misrepresentation, Verification
Level: Level 1

Topic: Law of Contract
Series: MAY 2013

FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Determines the document used to verify that ordered goods are supplied as per specifications.

Question

Which of the following is checked against a waybill to ensure that the goods ordered are the ones supplied?

A. Good received note
B. Purchase invoice
C. Purchase order
D. Store issue voucher
E. Delivery note

Answer

Find Related Questions by Tags, levels, etc.

Tags: Goods Received Note, Inventory, Verification, Waybill
Level: Level 1

AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence

Explanation of a contingent liability and audit procedures for its verification.

Question

Answer

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Tags: Audit Procedures, Contingent Liability, Legal claims, Verification
Level: Level 2

Topic: Audit and Assurance Evidence
Series: MAY 2017

AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment

Describe how you would verify the patents appearing in the financial statements of Tamale Pharma.

Question

Tamale Pharma specializes in the development of drugs for the pharmaceutical industry.

Required:
i) State how you could verify the following item appearing in the statement of financial position of Tamale Pharma as at 31 December 2018:

Patents.
(3.5 marks)

ii) State how you could verify the following item appearing in the statement of financial position of Tamale Pharma as at 31 December 2018:

Research and development.
(3.5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, IAS 38, Intangible Assets, Research and Development, Verification
Level: Level 2

Topic: Audit and Assurance Risk Environment
Series: MAY 2020

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

Question

Required:
Explain the audit procedures that would be adopted in verifying the land and building value in the financial statements. (7 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Financial Statements, Land and Building Valuation, Verification
Level: Level 2

Topic: Audit and Assurance Evidence
Series: NOV 2018

AAA – May 2020 – Q2 – Assurance Services

Evaluate the risks, audit implications, and ethical considerations for accepting an engagement to provide assurance on EnvironmentalCare Ghana's Sustainability Report, focusing on environmental and social KPIs.

Question

Extract from Sustainability Report	Year ended 31 December 2018 Draft	Year ended 31 December 2017 Actual
CO2 emissions (million tonnes)	26.8	28.3
Energy use (million kilowatt hours)	4,895	5,250
Charitable donations (GH¢ million)	10.5	8.2
Number of serious accidents in the workplace	60	68
Average annual expenditure on training per employee	GH¢180	GH¢175

You have also had a meeting with Kofi Ghana, the manager responsible for the audit of EnvironmentalCare Ghana, and notes of the meeting are given below.

Notes from meeting with audit manager, Kofi Ghana

Sustainability Ghana has audited EnvironmentalCare Ghana for three years, and it is a major audit client of the firm, due to its global presence and recent listing on two major stock exchanges. The audit is managed from the Airport office, which is also the location of the global headquarters of EnvironmentalCare Ghana. The audit work is nearly complete, and the annual report is to be published in about four weeks, in time for the company’s meeting, scheduled for 31 January 2019.
No work has been done on the KPIs, other than review them for consistency, as we would with any ‘other information’ issued with the financial statements. The KPIs are produced by EnvironmentalCare Ghana’s Sustainability Department, located in Fartown. There has been no visit to EnvironmentalCare Ghana’s offices in Fartown as it is in a remote location overseas, and the department’s based there are not relevant to the audit.
Audit procedures were performed on the charitable donations, as disclosed in a note to the financial statements, and our evidence indicates that there have been donations of GH¢9 million this year, which is the amount disclosed in the note. However, the draft KPI has a different figure of GH¢10.5 million, and this is the figure highlighted in the draft Chairman’s Statement as well as the draft Sustainability Report. GH¢9 million is material to the financial statements.
Your firm has recently established a sustainability reporting assurance team based at the
Airport office and if the engagement to report on the Sustainability Report is accepted, it
would be performed by members of that team, who would not be involved with the audit.
Required:
a) Identify and explain the matters to be evaluated in making the acceptance decision to
perform an assurance engagement on the Sustainability Report of EnvironmentalCare
Ghana. (14 marks)
b) Recommend procedures that could be used to verify the following draft KPIs:
i) The number of serious accidents in the workplace; and (3 marks)
ii) The average annual expenditure on training per employee. (3 marks)
(Total: 20 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Acceptance Decision, Assurance Engagement, EnvironmentalCare Ghana, KPIs, Procedures, Sustainability Reporting, Verification
Level: Level 3

Topic: Assurance services
Series: MAY 2020

Question Tag: Verification

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BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Determines the document used to verify that ordered goods are supplied as per specifications.

AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence

Explanation of a contingent liability and audit procedures for its verification.

AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment

Describe how you would verify the patents appearing in the financial statements of Tamale Pharma.

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

AAA – May 2020 – Q2 – Assurance Services

Evaluate the risks, audit implications, and ethical considerations for accepting an engagement to provide assurance on EnvironmentalCare Ghana's Sustainability Report, focusing on environmental and social KPIs.

BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Determines the document used to verify that ordered goods are supplied as per specifications.

AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence

Explanation of a contingent liability and audit procedures for its verification.

AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment

Describe how you would verify the patents appearing in the financial statements of Tamale Pharma.

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

AAA – May 2020 – Q2 – Assurance Services

Evaluate the risks, audit implications, and ethical considerations for accepting an engagement to provide assurance on EnvironmentalCare Ghana's Sustainability Report, focusing on environmental and social KPIs.

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Question Tag: Verification

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BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

You're reporting an error for "BL – May 2013 – L1 – SA – Q13 – Law of Contract"

FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Determines the document used to verify that ordered goods are supplied as per specifications.

You're reporting an error for "FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)"

AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence

Explanation of a contingent liability and audit procedures for its verification.

You're reporting an error for "AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence"

AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment

Describe how you would verify the patents appearing in the financial statements of Tamale Pharma.

You're reporting an error for "AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment"

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

You're reporting an error for "AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence"

AAA – May 2020 – Q2 – Assurance Services

Evaluate the risks, audit implications, and ethical considerations for accepting an engagement to provide assurance on EnvironmentalCare Ghana's Sustainability Report, focusing on environmental and social KPIs.

You're reporting an error for "AAA – May 2020 – Q2 – Assurance Services"

BL – May 2013 – L1 – SA – Q13 – Law of Contract

This question tests the understanding of a statement made with a request for verification in contract law.

You're reporting an error for "BL – May 2013 – L1 – SA – Q13 – Law of Contract"

FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Determines the document used to verify that ordered goods are supplied as per specifications.

You're reporting an error for "FA – May 2021 – L1 – SA – Q3 – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)"

AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence

Explanation of a contingent liability and audit procedures for its verification.

You're reporting an error for "AA – May 2017 – L2 – Q4b – Audit and Assurance Evidence"

AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment

Describe how you would verify the patents appearing in the financial statements of Tamale Pharma.

You're reporting an error for "AA – May 2020 – L2 – Q3b – Audit and Assurance Risk Environment"

AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence

Explains audit procedures for verifying the valuation of land and buildings in the financial statements.

You're reporting an error for "AA – Nov 2018 – L2 – Q4b – Audit and Assurance Evidence"

AAA – May 2020 – Q2 – Assurance Services

Evaluate the risks, audit implications, and ethical considerations for accepting an engagement to provide assurance on EnvironmentalCare Ghana's Sustainability Report, focusing on environmental and social KPIs.

You're reporting an error for "AAA – May 2020 – Q2 – Assurance Services"

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