Auditing - a systematic process of objectively obtaining and evaluating
respect of certain assertions about economic actions and events to
ascertain the degree
of correspondence between those assertions and established criteria
(a) List the factors, which may influence the auditors judgment in
relation to sufficiency of
the evidence so collected.
(b) State the factors that would enable the auditor assess the reliabilty
of such evidence.
SOLUTION TO QUESTION 4
(a) Sufficiency of
although those who are not may also benefit. They have been written
in relation to
study involving the reading of textbooks, and they apply to all subjects.
It is often
very difficult to pick out the important principles from such books.
either an emphasis of matter paragraph(s) is added to the report or if
the opinion is
other than unqualified.
Other auditor an auditor, other than the principal, including
whether using the same name or not, and correspondents.
Carry out a physical verification of material items
Agree figures to the general ledger
Verify purchase invoices
Check that registration of vehicles with the licensing authorities are
done in the name of
company rather than individuals
feel a bit panicky (most people do despite the apparent looks of
you) grip the table, take a deep breath, and get on with it. Remember
never as bad as they seem!
STUDY AND EXAMINATION TECHNIQUES
3. Allocate e
of information of an existing condition directly from a third party.
Continuing auditor the auditor who audited and reported on the
periods financial statements and continues as the auditor for the
Control environment - the
Freehold land and buildings
Obtain and examine title documents and costs relating to the land.
Ensure that title is registered in the name of the company at the
Agree balance to the General ledger
programmes certain area of the assignment may be left out.
(a) Define and explain what is meant by analytical review procedures.
(b) Mention four types of general analytical review procedures.
(c) What is the purpose of performing preliminary
Date of approval of the financial statementtssthe date on which
those with the
recognised authority assert that they have prepared the entitys
complete set of
financial statements, including the related notes, and that they have
responsibility for t
Appropriateness - the measure of the quality or reliability of audit
evidence and its
relevance to a particular assertion.
Assertions representations by management, explicit or otherwise,
that are embodied
in the financial statements.
23. Remember you do not have to score 100% to pass.
24. A final point; once youre in the examination room stay there and
make use of
every minute at your disposal.
25. Practice your technique when answering the questions set in the
Fraud refers to an intentional act by one or more individuals among
employees, or third parties, which results in a misrepresentation of
Going concern assumption an entity is ordinarily viewed as
continuing in business
SOLUTION TO QUESTION 3
(a) Types of audit are
(i) Final Audit
(ii) Management Audit
(iii) Interim Audit
(iv) Internal Audit
(v) Continuous Audit
(vi) Environmental Audit
(vii) Value for money Audit
(viii) Forensic Audit
(ix) Social Responsibility Audit.
Independent audit - providing reasonable assurance that published
financial reports are free from material misstatement and are in
legislation and relevant accounting standards.
Independent partner - a partner with sufficient exper
(a) As the audit manager in charge of an audit of a large
multinational company, draw up an
audit programme for fixed assets for the use of the field staff. (10
(b) What are the shortcomings of using standardised audit
programmes? (5 Marks)
053 - The Auditors Responsibilities to Detect and Report Errors and
056 - Analytical Review Procedures
057 - Auditing Accounting Estimates.
058 - Reports on Audited Financial Statements.
059 - The Auditors Consideration of an Entitys Abili
The reason for this is that , if he takes the appointment, he will be
baised unless he does
not mind to lose Jeje and come up clear and plain with the result of
(b) If he chooses to accept the appointment, then he must write to the
the companys budget and forecasts.
(iii) Comparison of current year account balances and financial
relations (e.g. rations)
with similar information for the industry in which the company
(iv) Study of the relationship of current year account bal
Management - comprises officers and others who also perform senior
functions. Management includes those charged with governance only
in those instances
when they perform such functions.
Management fraud fraud involving one or more members of
For all areas of the business
Audit Briefing (Pre-audit conference)
Date of Meeting
Name and level of staff to be briefed
Specific matters requiring particular attention such as changes in
6.1 Questions and answers
1. Two types of question are provided in this manual
(a) Questions set at the ends of chapters with answers provided in
(b) Questions with answers set in Appendix II
Questions with Answers
2. These questio
(i) COMPLIANCE TESTS
These are detailed tests of transactions, which seek to assure the
provide audit evidence) that the Internal control procedures are being
by the company management.
(ii) SUBSTANTIVE TESTS
These are tests of tr
(ii) General Controls, expected in a computer-based accounting system
(b) List and briefly comment on 5 (five) components of audit planning
documentation as an
important aspect of the audit process.
(c) You are required to provide what you consider should
6. Read the instructions at the top of the paper
7. Read the question paper once through. Make your choice of
Pick the easiest (if one appears so) and get on with it.
8. Read the question again caref
suppliers of the company are defrauding the company , through
payment for materials not
supplied. The Chairman has approached your firm of Chartered
and Co, to carry out an investigation into this matter and report your
IFAC Handbook Technical Pronouncements
Chitty D. 2004: ACCA Auditing Handbook 2004/2005. London:
Proposed International Standard on Auditing (UK and Ireland)
200; Objective and
Principles Governing an Audit of Financial St
which have a fine point).
AUDIT AND ASSURANCE
Charts and diagrams
16. A descriptive heading or title must be given to each diagram (using
the one in the
question if indicated).
17. Do not squeeze a diagram into a corner spread it out.
18. Do not clutt
GLOSSARY OF TERMS
Access controls procedures designed to restrict access to on-line
programmes and date.
Accounting estimate an approximation of the amount of an item in
of a precise means of measurement.
headline the main areas and subdivisions of those areas. Notes made
or private study should not go straight into your NOTEBOOK. Take
them down on a
rough paper and write them in your NOTEBOOK as soon as
possible after the
lecture or study