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Auditing And Investigation Theory (Weekend) Question Paper

Auditing And Investigation Theory (Weekend)

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2011

UNIVERSITY EXAMINATIONS: 2010/2011
THIRD YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CAA 306: AUDITING AND INVESTIGATION THEORY (WEEKEND)
DATE: AUGUST 2011 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
Question One
Mustard Seed Company is an independent construction company dealing with large scale interest in
East Africa especially in Dar es Salaam. Mustard Seed Company has recently established an audit committee, the members of which are very concerned about meeting corporate governance ‘best practice’ particularly since they are currently looking at the possibility of obtaining a stock exchange listing. You are an internal auditor with the company and you have been asked to conduct a review of how well the company is meeting relevant corporate governance requirements. In addition, the CEO
has informed you that in the conduct of your duties you should always be on the company’s side and before you report anything to the external auditor you should consult with management. Furthermore,the internal auditor is supposed to consult with management before making any subjective decision.
Based on the above information, you are required to prepare a report that addresses the following:
a) Briefly define the term corporate governance (2 Marks)
b) Make short notes on the following:
i) Compilation engagement (4 Marks)
ii) Agreed upon procedures (4 Marks)
c) (i) Define the term prospective financial information (3 Marks)
(ii) Distinguish between a reasonable assurance engagement and a limited assurance engagement
(4 Marks)
2
(iii) Outline matters that an auditor should consider before accepting an engagement to examine
prospective financial information (4 Marks)
d) (i) Highlight any five threats to an auditors independence (5 Marks)
(ii) Outline the circumstances that may compromise an auditor’s independence (4 Marks)
(Total 30 Marks)
Question Two
a) Define the term assurance engagement (3 Marks)
b) Highlight four elements of an assurance engagement. (4 Marks)
c) Describe two types of assurance engagements (4 Marks)
d) (i) Outline the problems encountered in providing assurance services. (4 Marks)
(ii) Summarize the characteristics that an auditor should consider before accepting an engagement
(5 Marks)
(Total 20 Marks)
Question Three
a) Define the term forensic audit (2 Marks)
b) Summarize 8 fraud investigation procedures that an auditor can take. (8 Marks)
c) Distinguish between statutory and forensic audit (4 Marks)
d) Highlight the applications of forensic audit. (6 Marks)
(Total 20 Marks)
Question Four
a) Define the term due diligence (4 Marks)
b) Outline the matters to be included in a due diligence engagement (6 Marks)
c) Highlight five matters to consider before accepting a due diligence assignment (5 Marks)
d) Explain any five examples of due diligence review (5 Marks)
(Total 20 Marks)
Question Five
a) Define the term fraudulent reporting (2 Marks)
b) Outline examples of fraudulent reporting (6 Marks)
c) Describe indicators that an auditor would look out for to imply that there are frauds and
errors in an entity (6 Marks)
d) Summarize an auditor’s actions when he suspects that there are frauds and errors in an entity.
(6 Marks)
(Total 20 Marks)

Auditing And Investigation Theory (Weekend) Question Paper

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