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Auditing Question Paper

Auditing

Course:Cpa

Institution: Strathmore University question papers

Exam Year:2009

QUESTION ONE
Going concern concept is one of the fundamental assumption underlying the preparation of financial statements. What are the procedures you would perform to ensure that the going concern is still appropriate to your clients. (10 marks)
(Total 10 Marks)

QUESTION TWO
a) Explain why auditors carry out circularisation of debtors. (6 marks)
b) Distinguish between positive and negative debtors circularisation procedures. (2 marks)
c) Describe in detail the work you would carry out in scrutinising the replies to the debtors circularisation and in confirming whether the debtors balance are collectible in the following situations:
i. Where the debtor does not agree with the balance & states a difference. (2 marks)
ii. Where the debtor reports that he cannot confirm the balance. (2 marks)
iii. Where no reply is received from the debtor. (4 marks)
iv. List the stages of a debtors circularisation. (4 marks)
(Total 20 Marks)

QUESTION THREE
a. What indications on factors might the auditor observe that would cast doubts on the appropriateness of the going concern of a client business? (8 marks)
b. List counter indications that might exist in a business to overcome the problems in
a) above. (4 marks)
c. State what steps you would take to ensure that the concept of going concern was applicable to the client you are about to audit. (8 marks)
(Total 20 Marks)

QUESTION FOUR
a) Define the term audit programme (2 marks)
b) Write in point form an audit programme to cover salary and wages of a small size firm. (8 marks)
c) Outline the procedures you would carry out in the verification of Creditors (10 marks)
(Total 20 Marks)

Auditing Question Paper

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