Topic: Introduction to Auditing

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AA – May 2024 – L2 – SA – Q5 – Introduction to Auditing

This question tests understanding of the objectives and responsibilities of an independent auditor as specified in ISA 200 and explores the roles of auditing standards in the accounting profession.

Question

The International Standards on Auditing 200 (ISA 200) made some important pronouncements on the Independent Auditor.

Required:

a. Explain two objectives of the Independent Auditor as specified in ISA 200. (4 Marks)

b. Explain four tasks ISA 200 requires the Independent Auditor to perform. (8 Marks)

c. Explain the roles of auditing standards in the accounting profession. (3 Marks)

Answer

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Tags: Audit Roles, Auditing Standards, Ethical Compliance, Independent Auditor, ISA 200
Level: Level 2

Topic: Introduction to Auditing
Series: MAY 2024

AA – Nov 2019 – L2 – Q3 – Introduction to Auditing

Discuss the parties involved in the audit assurance process, conditions for accepting an assurance engagement, and recognizing reliable evidence.

Question

A financial analyst in his contribution at a seminar stated that audited financial statements show the records of stewardship of a company’s activities and the financial position of a company at the end of a period.

The financial report has input from key stakeholders who must perform their duties well and in an objective manner. In view of this, the report should give confidence to the users of the financial statements and support good corporate governance.

The financial report is used for decision making and is prepared based on management estimates, judgement, assumptions, and reliable evidence.

As a chartered accountant, you have been invited to make a contribution at the seminar in support of the statement of the analyst:

You are required to discuss:

Parties to an audit assurance process, stating their duties and rights. (4½ Marks)
When a professional should accept an assurance engagement. (8 Marks)
How to recognize a reliable evidence in an audit and assurance engagement. (7½ Marks)

Answer

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Tags: Audit Assurance, Parties to Audit, Reliability of Evidence
Level: Level 2

Topic: Audit evidence, Introduction to Auditing
Series: NOV 2019

AA – Nov 2019 – L2 – Q1 – Introduction to Auditing

Discuss the objectives of external audit services, eligibility for external auditors, rights and duties of external auditors, and management responsibilities.

Question

Boniface Bank Limited placed an advert in the national dailies requesting for proposals for external audit services.

You are provided with the following information:

Boniface Bank Limited was licensed as a commercial bank in 2018. The shareholders’ fund is N25 billion and the bank is mainly in the retail business. The bank is a national bank with presence in the state capitals of the six geopolitical zones in Nigeria. The bank is gaining recognition as an institution that finances small and medium scale enterprises in the country.

The policy of the bank is to have an auditor for a 10-year tenure and a partner rotation every five years.

Scope of work

In line with best practices, external auditors are expected to be independent and conduct the audit of the books of the bank in conformity with the International Financial Reporting Standards (IFRS) and the International Standards on Auditing (ISA). They are also expected to provide other services as the need arises that will not compromise their independence.

To be specific, the successful firm will be required to:

Conduct an audit and report on the state of affairs and operations of the bank for the year ended December 31, 2018;
Advise management on the treatment and disclosures of certain items in the financial statements as the need arises, for example, new and revised standards;
Make presentations to shareholders on the state of affairs and operations of the bank at the Annual General Meeting; and
Present the management letter on weaknesses identified during the audit.

Qualifications of the firm

The audit firm to be selected should have at least six partners with good quality control processes and robust audit software. In addition, the firm must have subject matter experts in the International Financial Reporting Standards.

The proposal should state the firm’s experience in bank audits, fee quote, the proposed engagement team, the audit approach, and relevant activities for smooth operation of the audit including steps necessary to conduct a hitch-free audit.

Independence

The proposal should indicate how the firm will ensure that it maintains its independence and avoids conflicts of interest throughout the period of appointment as auditors.

Submission

You are expected to submit your proposal not later than 5p.m. on December 13,
2018.
The shortlisted firms shall be invited for presentations as soon as possible and will
be finally contacted for follow up interviews if successful.
(For any further clarification, please contact Olaolu Aki on 0071562534.)
The partners of your firm are interested in the proposal of Boniface Bank Limited.
You have been requested to make input for the proposal as soon as possible.

Required:

Discuss the following:
a. Objectives of the external audit of Boniface Bank Limited. (4 Marks)
b. Eligibility for qualification as external auditor. (10 Marks)
c. Rights and duties of external auditors under the Companies and Allied
Matters Act CAP C20 LFN 2004. (10 Marks)
d. Responsibility of management and those charged with governance.
(10 Marks)
e. Requirements of auditors in relation to International Standards on Auditing
(ISA 200). (6 Marks)

Answer

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Tags: Audit Proposal, Boniface Bank, External audit, Independence
Level: Level 2

Topic: Introduction to Auditing

AA – Nov 2020 – L2 – Q2 – Introduction to Auditing

Explain key concepts of auditing, including the objective of audit, independence, materiality, and the roles of management and auditors.

Question

In a bid to increase the interest of students in auditing, your audit firm has instituted a program in conjunction with universities in Nigeria, whereby the universities provide the firm with an opportunity to speak to students about the audit profession and what it means to be an auditor with a view to getting them interested in pursuing a career in audit when they graduate. During the program, audit personnel interact one-on-one with the students. As an audit senior in the firm, you have been asked to attend one of such programs and present a paper.

Required:
Explain the following in relation to the contents of your paper:
a. The definition and objective of an audit (2 Marks)
b. The concepts of accountability, stewardship, and agency (3 Marks)
c. Independence of the auditor (1 Mark)
d. True and fair view (2 Marks)
e. Materiality (2 Marks)
f. The rights and duties of an external auditor (6 Marks)
g. The responsibilities of management (4 Marks)

Answer

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Tags: Audit Definition, Audit Objective
Level: Level 2

Topic: Introduction to Auditing, Professional Ethics and Code of Conduct for Auditors
Series: NOV 2020

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

Question

Mr. Ajibade, a businessman based in the South West region of Nigeria intends to start a new company. The new company, when formed, will focus solely on the production of face masks and alcohol-based hand sanitisers which are needed to prevent the spread of the novel corona virus. This has been incorporated into the draft Memorandum of Association to be submitted to the Corporate Affairs Commission (CAC).

Mr. Ajibade has heard of section 377 of Companies and Allied Matters Act (CAMA) Cap C20 LFN 2004, which offers exemption from an audit if a company qualifies as a small company as per section 351 of the Act. He thinks that when he starts a small company, he will therefore be exempted from statutory audit and so save cost.

Mr. Ajibade has a growth plan for his prospective company. He has also heard that if the company is to grow bigger in the future, he will require more funding in the form of loans from banks and other financial institutions. The banks will require audited financial statements as a prerequisite to granting his company loan facilities. He is therefore, curious to know more about the importance of audited financial statements.
He has approached you for advice.

Required:
a. What qualifies a company as a small company according to CAMA.
(6 Marks)
b. The benefits and limitations of an audit.
(9 Marks)
c. The eligibility for qualification as external auditor.
(6 Marks)
d. The scope of a statutory audit.
(4 Marks)
e. According to ISA 300: Planning an Audit of Financial Statements, the objective of the auditor is to plan the audit work so that the audit will be performed in an effective manner.
Required:
Explain the benefits of adequate planning of the audit.
(5 Marks)
f. Explain THREE risk assessment procedures required by ISA 315: Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment.
(10 Marks)

Answer

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Tags: Audit Benefits, Audit Exemptions, Audit Requirements, Professional Ethics, Risk Assessment Procedures, Small Companies
Level: Level 2

AA – Mar/Jul 2020 – L2 – Q4 – Various Types of Audit

Explains and provides examples for different types of audits including forensic, information systems, compliance, and value for money audits.

Question

During a debate session, there were arguments among the accountancy students of the University of Kunu that the quality of audit work performed recently did not portray accountancy professionals as men of integrity. In their opinion, most financial malpractice committed by members of staff of a company are not detected by the auditors at the time of their audit and this causes corporate failures or leaves the shareholders with little or no return on their investments.

It is obvious that most students are unclear about the various types of audit. They all agreed that an informed person should be invited to educate members of the association on this topic. As an ex-student of University of Kunu, you have been invited to give a talk on various types of audit.

Required:
Explain the following, giving examples to support your answer:
a. Forensic audit (5 Marks)
b. Information systems audit (5 Marks)
c. Compliance audit (5 Marks)
d. Value for money audit (5 Marks)
(Total 20 Marks)

Answer

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Level: Level 2

Topic: Introduction to Auditing, Regulatory Framework for Auditing, The Role and Responsibilities of Auditors
Series: MAR/JULY 2020

AA – May 2024 – L2 – SA – Q5 – Introduction to Auditing

This question tests understanding of the objectives and responsibilities of an independent auditor as specified in ISA 200 and explores the roles of auditing standards in the accounting profession.

Question

The International Standards on Auditing 200 (ISA 200) made some important pronouncements on the Independent Auditor.

Required:

a. Explain two objectives of the Independent Auditor as specified in ISA 200. (4 Marks)

b. Explain four tasks ISA 200 requires the Independent Auditor to perform. (8 Marks)

c. Explain the roles of auditing standards in the accounting profession. (3 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Roles, Auditing Standards, Ethical Compliance, Independent Auditor, ISA 200
Level: Level 2

Topic: Introduction to Auditing
Series: MAY 2024

AA – Nov 2019 – L2 – Q3 – Introduction to Auditing

Discuss the parties involved in the audit assurance process, conditions for accepting an assurance engagement, and recognizing reliable evidence.

Question

The financial report is used for decision making and is prepared based on management estimates, judgement, assumptions, and reliable evidence.

As a chartered accountant, you have been invited to make a contribution at the seminar in support of the statement of the analyst:

You are required to discuss:

Parties to an audit assurance process, stating their duties and rights. (4½ Marks)
When a professional should accept an assurance engagement. (8 Marks)
How to recognize a reliable evidence in an audit and assurance engagement. (7½ Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Assurance, Parties to Audit, Reliability of Evidence
Level: Level 2

Topic: Audit evidence, Introduction to Auditing
Series: NOV 2019

AA – Nov 2019 – L2 – Q1 – Introduction to Auditing

Discuss the objectives of external audit services, eligibility for external auditors, rights and duties of external auditors, and management responsibilities.

Question

Boniface Bank Limited placed an advert in the national dailies requesting for proposals for external audit services.

You are provided with the following information:

The policy of the bank is to have an auditor for a 10-year tenure and a partner rotation every five years.

Scope of work

To be specific, the successful firm will be required to:

Conduct an audit and report on the state of affairs and operations of the bank for the year ended December 31, 2018;
Advise management on the treatment and disclosures of certain items in the financial statements as the need arises, for example, new and revised standards;
Make presentations to shareholders on the state of affairs and operations of the bank at the Annual General Meeting; and
Present the management letter on weaknesses identified during the audit.

Qualifications of the firm

Independence

The proposal should indicate how the firm will ensure that it maintains its independence and avoids conflicts of interest throughout the period of appointment as auditors.

Submission

Required:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Proposal, Boniface Bank, External audit, Independence
Level: Level 2

Topic: Introduction to Auditing

AA – Nov 2020 – L2 – Q2 – Introduction to Auditing

Explain key concepts of auditing, including the objective of audit, independence, materiality, and the roles of management and auditors.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Definition, Audit Objective
Level: Level 2

Topic: Introduction to Auditing, Professional Ethics and Code of Conduct for Auditors
Series: NOV 2020

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Benefits, Audit Exemptions, Audit Requirements, Professional Ethics, Risk Assessment Procedures, Small Companies
Level: Level 2

AA – Mar/Jul 2020 – L2 – Q4 – Various Types of Audit

Explains and provides examples for different types of audits including forensic, information systems, compliance, and value for money audits.

Question

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 2

Topic: Introduction to Auditing, Regulatory Framework for Auditing, The Role and Responsibilities of Auditors
Series: MAR/JULY 2020

Topic: Introduction to Auditing

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AA – May 2024 – L2 – SA – Q5 – Introduction to Auditing

This question tests understanding of the objectives and responsibilities of an independent auditor as specified in ISA 200 and explores the roles of auditing standards in the accounting profession.

AA – Nov 2019 – L2 – Q3 – Introduction to Auditing

Discuss the parties involved in the audit assurance process, conditions for accepting an assurance engagement, and recognizing reliable evidence.

AA – Nov 2019 – L2 – Q1 – Introduction to Auditing

Discuss the objectives of external audit services, eligibility for external auditors, rights and duties of external auditors, and management responsibilities.

AA – Nov 2020 – L2 – Q2 – Introduction to Auditing

Explain key concepts of auditing, including the objective of audit, independence, materiality, and the roles of management and auditors.

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

AA – Mar/Jul 2020 – L2 – Q4 – Various Types of Audit

Explains and provides examples for different types of audits including forensic, information systems, compliance, and value for money audits.

AA – May 2024 – L2 – SA – Q5 – Introduction to Auditing

This question tests understanding of the objectives and responsibilities of an independent auditor as specified in ISA 200 and explores the roles of auditing standards in the accounting profession.

AA – Nov 2019 – L2 – Q3 – Introduction to Auditing

Discuss the parties involved in the audit assurance process, conditions for accepting an assurance engagement, and recognizing reliable evidence.

AA – Nov 2019 – L2 – Q1 – Introduction to Auditing

Discuss the objectives of external audit services, eligibility for external auditors, rights and duties of external auditors, and management responsibilities.

AA – Nov 2020 – L2 – Q2 – Introduction to Auditing

Explain key concepts of auditing, including the objective of audit, independence, materiality, and the roles of management and auditors.

AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

AA – Mar/Jul 2020 – L2 – Q4 – Various Types of Audit

Explains and provides examples for different types of audits including forensic, information systems, compliance, and value for money audits.

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AA – May 2024 – L2 – SA – Q5 – Introduction to Auditing

This question tests understanding of the objectives and responsibilities of an independent auditor as specified in ISA 200 and explores the roles of auditing standards in the accounting profession.

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AA – Nov 2019 – L2 – Q3 – Introduction to Auditing

Discuss the parties involved in the audit assurance process, conditions for accepting an assurance engagement, and recognizing reliable evidence.

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AA – Nov 2019 – L2 – Q1 – Introduction to Auditing

Discuss the objectives of external audit services, eligibility for external auditors, rights and duties of external auditors, and management responsibilities.

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AA – Nov 2020 – L2 – Q2 – Introduction to Auditing

Explain key concepts of auditing, including the objective of audit, independence, materiality, and the roles of management and auditors.

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AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

You're reporting an error for "AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification"

AA – Mar/Jul 2020 – L2 – Q4 – Various Types of Audit

Explains and provides examples for different types of audits including forensic, information systems, compliance, and value for money audits.

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AA – May 2024 – L2 – SA – Q5 – Introduction to Auditing

This question tests understanding of the objectives and responsibilities of an independent auditor as specified in ISA 200 and explores the roles of auditing standards in the accounting profession.

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AA – Nov 2019 – L2 – Q3 – Introduction to Auditing

Discuss the parties involved in the audit assurance process, conditions for accepting an assurance engagement, and recognizing reliable evidence.

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AA – Nov 2019 – L2 – Q1 – Introduction to Auditing

Discuss the objectives of external audit services, eligibility for external auditors, rights and duties of external auditors, and management responsibilities.

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AA – Nov 2020 – L2 – Q2 – Introduction to Auditing

Explain key concepts of auditing, including the objective of audit, independence, materiality, and the roles of management and auditors.

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AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification

Explanation of the audit requirements and exemptions for small companies, including the benefits and limitations of audits, eligibility for external auditors, and audit planning and risk assessment procedures.

You're reporting an error for "AA – Mar/Jul 2020 – L2 – Q1 – Small Company Qualification"

AA – Mar/Jul 2020 – L2 – Q4 – Various Types of Audit

Explains and provides examples for different types of audits including forensic, information systems, compliance, and value for money audits.

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