Get premium membership and access questions with answers, video lessons as well as revision papers.
a) Control procedures are those policies and procedures in addition to the control environment which management has established to achieve the entity‘s specific objectives. Control procedures include the following:
- Preparation and review of reconciliation‘s;
- Checking the arithmetical accuracy of the records;
- Having proper segregation of duties;
- Physical controls to safeguard the assets of the company;
- Controlling applications & environment of computer information systems e.g. by establishing controls over:
- Changes to computer programs.
- Access to data files.
- Approving and controlling the use of documents.
- Limiting direct physical access to assets and records
b) Internal check is an element of the internal control system which ensures that the activities of an individual in the organization or entity, is automatically, checked by another individual. Internal check is boosted by the segregation of duties such that no person can carry out a transaction from initiation to conclusion without his work coming under the check of another person. Internal checks can also be defined as: ?The checks on the day to day transactions which operate continuously as part of the routine system whereby the work of one person is proved independently or is complementary to the work of another, the objective being the prevention or early detection of errors and fraud
c) A vouching audit is also known as a substantive audit.
This audit approach involves checking the authenticity of recorded transactions by inspecting the document(s) used in processing of the transaction. It is proving that the transactions occurred, they are complete, correctly measured and they relate to the correct period if they are of a revenue or expense nature.
d) A walk-through refers to the auditor selecting a particular transaction and tracing (or walking) it through the accounting information system from the time it was first captured and input as data to its final disposition in the financial statements. The purpose of the walk-through may be either for the auditor to identify specific control procedures or to confirm an existing understanding of control procedures in the accounting information system. The walk-through may be the tracing of an event, either part way through the system or entirely through the system, depending on the extent of the evidence or knowledge required by the auditor.
e) Weakness tests.
These are tests carried out to areas of weakness in the internal control system. The objective is to identify weak controls where corrective action should be taken to enhance the internal control system.
Wilfykil answered the question on February 21, 2019 at 10:10
- Outline the statutory provisions with regard to duties of external auditors(Solved)
Outline the statutory provisions with regard to duties of external auditors
Date posted: February 21, 2019. Answers (1)
- Explain the value derived from the work of external auditors.(Solved)
Explain the value derived from the work of external auditors.
Date posted: February 21, 2019. Answers (1)
- Write briefly explanatory notes on the following types of audit:
i. Statutory audit;
ii. Private audit;
iii. Balance sheet audit;
iv. Management audit;(Solved)
Write briefly explanatory notes on the following types of audit:
i. Statutory audit;
ii. Private audit;
iii. Balance sheet audit;
iv. Management audit;
Date posted: February 21, 2019. Answers (1)
- The director of one of your growing clients have decided to create an internal audit function in their organizational structure(Solved)
The director of one of your growing clients have decided to create an internal audit function in their organizational structure
Required:
a) List and briefly describe the duties you would expect the internal audit staff to perform.
b) List and explain the criteria which you would consider before deciding to rely on the work of the internal audit function.
c) State the extent to which you, as an external auditor, can rely on the work of the internal audit function.
Date posted: February 21, 2019. Answers (1)
- Describe the various procedures of obtaining audit evidence giving an example of each by way of illustration.(Solved)
Describe the various procedures of obtaining audit evidence giving an example of each by way of illustration.
Date posted: February 21, 2019. Answers (1)
- Write a brief explanatory notes on the following terms in relation to audit evidence:
i. Relevance.
ii. Reliability.
iii. Sufficiency.(Solved)
Write a brief explanatory notes on the following terms in relation to audit evidence:
i. Relevance.
ii. Reliability.
iii. Sufficiency.
Date posted: February 21, 2019. Answers (1)
- Explain the meaning of the "audit evidence"(Solved)
Explain the meaning of the "audit evidence"
Date posted: February 21, 2019. Answers (1)
- Explain the meaning of the following audit terms:
i. Tests of control.
ii. Substantive tests.(Solved)
Explain the meaning of the following audit terms:
i. Tests of control.
ii. Substantive tests.
Date posted: February 21, 2019. Answers (1)
- List six examples of key control questions that would be suitable for inclusion in an ICEQ for a wages accounting system.(Solved)
List six examples of key control questions that would be suitable for inclusion in an ICEQ for a wages accounting system.
Date posted: February 21, 2019. Answers (1)
- Explain how an Internal Control Evaluation Questionnaire (ICEQ) differs from an Internal Control Questionnaire (ICQ).(Solved)
Explain how an Internal Control Evaluation Questionnaire (ICEQ) differs from an Internal Control Questionnaire (ICQ).
Date posted: February 21, 2019. Answers (1)
- Give four merits of using a flowchart to record an accounting system.(Solved)
Give four merits of using a flowchart to record an accounting system.
Date posted: February 21, 2019. Answers (1)
- The auditing standard on subsequent events provide the basic principles and procedures as to the auditor‘s responsibilities and deal with:
i. Dating the auditor‘s report
ii. Audit...(Solved)
The auditing standard on subsequent events provide the basic principles and procedures as to the auditor‘s responsibilities and deal with:
i. Dating the auditor‘s report
ii. Audit procedures
iii. Events after the date of the audit report.
Required:
a) In the context of subsequent events, what is the significance of the data of the auditor‘s report?
b) Outline the audit procedures considered necessary between the balance sheet date and the date of the auditor‘s report.
c) Summarise the appropriate actions of the auditor regarding events after the date of the audit report.
Date posted: February 21, 2019. Answers (1)
- Specialists or experts are occasionally required by external auditors mainly in connection with the valuation assets and the determination of liabilities.(Solved)
Specialists or experts are occasionally required by external auditors mainly in connection with the valuation assets and the determination of liabilities.
Required:
a) The necessity for reliance on specialist.
b) The extent to which the specialist should be independent?
c) Competence of the specialist.
Date posted: February 21, 2019. Answers (1)
- Most errors in computer based accounting systems can be traced to faulty input. Controls over the completeness and validity of all inputs are vital. Control...(Solved)
Most errors in computer based accounting systems can be traced to faulty input. Controls over the completeness and validity of all inputs are vital. Control over data conversions, controls over rejections and their correction and reprocessing, batch controls and computer edit controls affect both completeness and validity
Required:
a) Explain the controls that can be established over completeness of input.
b) What controls can be established over validity?
c) Programmed edit checks are probably the most familiar input controls and certainly the most effective. Give examples of these controls bringing out clearly:
i. The name of the edit control.
ii. Description of the control.
iii. The objective of the control.
Date posted: February 21, 2019. Answers (1)
- Your firm audits Clean Paints Ltd. and you are planning the audit of stock and work in progress for the year ended 31 December 2000....(Solved)
Your firm audits Clean Paints Ltd. and you are planning the audit of stock and work in progress for the year ended 31 December 2000. Clean Paints Ltd. determines the value of stock in its financial statements by the year -end stocktake. There is no perpetual Stock Inventory System though stock is counted quarterly for the purposes of management accounting
Stock and work in progress is held at the warehouse which is next to the company‘s factory.
Required:
a) State the areas that you will expect the client‘s stocktaking instructions to cover.
b) Describe the work you will perform and the matters you will record at the stock-take attendance.
Date posted: February 21, 2019. Answers (1)
- During the course of an audit, the auditor attempts to obtain sufficient relevant and reliable evidence to provide the satisfaction that the financial records are...(Solved)
During the course of an audit, the auditor attempts to obtain sufficient relevant and reliable evidence to provide the satisfaction that the financial records are completed and accurate. One of the ways that the auditor obtains satisfaction is to select representative samples of transactions and balances for detailed testing, such samples being made using either statistical of non-statistical methods.
Required:
a) Describe the main factors which influence the auditor in determining the size of the sample he will use for his detailed testing.
b) Describe three areas where the judgment will be exercised by the auditor when using statistical sampling.
Date posted: February 21, 2019. Answers (1)
- Write in point form an audit programme to cover salary and wages of a small size firm.(Solved)
Write in point form an audit programme to cover salary and wages of a small size firm.
Date posted: February 21, 2019. Answers (1)
- Define the term audit programme.(Solved)
Define the term audit programme.
Date posted: February 21, 2019. Answers (1)
- Write brief notes on the following auditing techniques:
i. Inspection;
ii. Observation;
iii. Enquiry.(Solved)
Write brief notes on the following auditing techniques:
i. Inspection;
ii. Observation;
iii. Enquiry.
Date posted: February 21, 2019. Answers (1)
- The matter listed below are always included in the internal control of a firm. You are required to explain the purpose of each of the...(Solved)
The matter listed below are always included in the internal control of a firm. You are required to explain the purpose of each of the items listed as (a), (b) and (c) below. Indicate the compliance tests you would carry out in order to ensure that the
intended controls were operating properly.
a) A requirement that mail is opened by two responsible employees who must promptly make listings of all receipts.
b) A rule that a fixed asset register must be maintained and updated promptly.
c) A requirement that a bank reconciliation statement is prepared on monthly basis.
Date posted: February 21, 2019. Answers (1)