Principles Of Auditing Question Paper

Principles Of Auditing

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2009

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2008/2009
INSTITUTE OF OPEN LEARNING
EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE
BAC 303: PRINCIPLES OF AUDITING
DATE: FRIDAY, 14TH AUGUST 2009

TIME: 11.00 A.M. - 1.00 P.M.

INSTRUCTIONS: Answer ALL questions.

1.
(a)
What
is
auditing
(2
marks)

(b)
Discuss the differences between early and modern audits.
(10 marks)

(c)
What are the disadvantages of an audit.

(4 marks)

2.
(a)
What is meant by letter of engagement.

(4 marks)

(b)
Your firm has recently been appointed auditors of Wasafiri Ltd, a
transport company quoted on the stock Exchange. Explain why a
letter of engagement is desirable for this appointment.

(6 marks)

(c)
Explain the rights of an auditor.
(12
marks)

3. (a) Explain
the
meaning
of the following terms:
(i)
Relevant
audit
evidence
(2
marks)
(ii)
Reliable
audit
evidence (3
marks)
(iii)
Sufficient
audit
evidence
(3
marks)
(b)
Describe briefly the nature and reliability of each of the following
techniques of audit testing giving an example of each:
(i)
Inspection
(4
marks)
(ii)
Observation
(3
marks)
(iii)
Inquiry
(3
marks)

4.
(a)
Under what circumstances would an audit report be qualified?
(8 marks)

(b)
Discuss auditors liability under common law.

(6 marks)
*****************
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