-Helps in minimizing the liability to any third parties that may be involved.
-Helps in ensuring commitment of the client to a given obligation in his/her audit.
-Helps in explaining the forms of engagement reports that may be issued.
-Also helps in educating the client and the audit on his/her specific duties such as the basis of charging the fees.
-Helps in documentation and confirmation of the auditor's acceptance for a given engagement.
-Helps in ensuring no misunderstandings between the auditor and the clients involved in the engagement.
jim items answered the question on March 15, 2019 at 06:14
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Difference between the responsibilities of internal auditors and external auditors for the prevention, detection and reporting of fraud and error
(Solved)
Difference between the responsibilities of internal auditors and external auditors for the prevention, detection and reporting of fraud and error
Date posted:
March 13, 2019
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Answers (1)
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What is auditing sampling?
(Solved)
What is auditing sampling?
Date posted:
March 7, 2019
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Answers (1)
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Briefly explain how an auditor verifies the following items in a computerized system.
(Solved)
Briefly explain how an auditor verifies the following items in a computerized system.
i) Standing data in a master file
ii) Alterations made in the computer programs.
Date posted:
February 23, 2019
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Answers (1)
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The computerization of business operations has posed many challenges to the auditor.
Explain the difficulties experienced by an auditor in each of the following situations:
(Solved)
The computerization of business operations has posed many challenges to the auditor.
Explain the difficulties experienced by an auditor in each of the following situations:
i) In the use of test packs.
ii) In on-line systems.
iii) When auditing the output of a complex computerized system.
Date posted:
February 23, 2019
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Answers (1)
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Explain the steps an auditor should take if he concludes that the client has made a departure from an accounting standard in the preparation of...
(Solved)
Explain the steps an auditor should take if he concludes that the client has made a departure from an accounting standard in the preparation of the financial statements
Date posted:
February 23, 2019
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Answers (1)
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Summarise the principal contents of a statement of directors‘ responsibilities to be included in financial statements
(Solved)
Summarise the principal contents of a statement of directors‘ responsibilities to be included in financial statements
Date posted:
February 23, 2019
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Answers (1)
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Outline the audit procedures an audit firm should follow in the verification of a manufacturing company‘s liabilities.
(Solved)
Outline the audit procedures an audit firm should follow in the verification of a manufacturing company‘s liabilities.
Date posted:
February 23, 2019
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Answers (1)
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Your audit firm, Kimani and Associates has been contracted by the government to audit the procurement system followed by the government.
(Solved)
Your audit firm, Kimani and Associates has been contracted by the government to audit the procurement system followed by the government.
Required:
i) Identify the likely risk areas that your firm may encounter in the audit
ii) Suggest possible measures the government can implement to strengthen the internal control system on procurements.
Date posted:
February 23, 2019
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Answers (1)
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Your audit senior has assigned you the responsibility of auditing the stock of your client, XYZ Supermarket Ltd. for the year ending 31 December 2005....
(Solved)
Your audit senior has assigned you the responsibility of auditing the stock of your client, XYZ Supermarket Ltd. for the year ending 31 December 2005. The company‘s stock take is carried out once a year in the month of November simultaneously for all the retail outlets.
Required:
a) State the audit assurances you would seek to obtain in the audit of stock.
b) Describe the audit procedures that you would perform in order to be satisfied as to the validity of the amount attributed to stock in the balance sheet of XYZ Supermarket Ltd.
c) Define the word ―bar coding and explain its importance to XYZ Supermarket Ltd.
Date posted:
February 23, 2019
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Answers (1)
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Explain two reasons why an auditor should consider materiality when selecting a sample size.
(Solved)
Explain two reasons why an auditor should consider materiality when selecting a sample size.
Date posted:
February 23, 2019
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Answers (1)
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Identify the cases where an auditor is required to conduct a complete check of all the transactions and balances of a business
(Solved)
Identify the cases where an auditor is required to conduct a complete check of all the transactions and balances of a business
Date posted:
February 23, 2019
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Answers (1)
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Explain the reasons why an auditor is not required to carry out a complete check of all the transactions and balances of a business
(Solved)
Explain the reasons why an auditor is not required to carry out a complete check of all the transactions and balances of a business
Date posted:
February 23, 2019
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Answers (1)
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Briefly explain how the auditor can use each of the following methods of sample selection when carrying out his audit assignment
(Solved)
Briefly explain how the auditor can use each of the following methods of sample selection when carrying out his audit assignment
i) Stratified sampling
ii) Cluster sampling
iii) Haphazard sampling
iv) Block sampling
Date posted:
February 23, 2019
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Answers (1)
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Highlight the possible defences available to an auditor in a court of law who has been sued for failure to detect fraud in client‘s company
(Solved)
Highlight the possible defences available to an auditor in a court of law who has been sued for failure to detect fraud in client‘s company
Date posted:
February 23, 2019
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Answers (1)
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Explain the ways in which an auditor can minimize his potential liability for professional negligence
(Solved)
Explain the ways in which an auditor can minimize his potential liability for professional negligence
Date posted:
February 23, 2019
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Answers (1)
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Highlight the qualities required of the final accounts prepared by a client company
(Solved)
Highlight the qualities required of the final accounts prepared by a client company
Date posted:
February 23, 2019
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Answers (1)
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Outline the ways in which an auditor acquires knowledge about the client‘s business and industry
(Solved)
Outline the ways in which an auditor acquires knowledge about the client‘s business and industry
Date posted:
February 23, 2019
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Answers (1)
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Explain the matters that an auditor should take into account at the planning stage of an audit exercise
(Solved)
Explain the matters that an auditor should take into account at the planning stage of an audit exercise
Date posted:
February 23, 2019
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Answers (1)
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Your are currently engaged in planning the audit of the payroll system of Ujenzi Ltd a manufacturing company, for the year ending 30 June 2005,...
(Solved)
Your are currently engaged in planning the audit of the payroll system of Ujenzi Ltd a manufacturing company, for the year ending 30 June 2005, Ujenzi Ltd‘s payroll system is fully computerized
Required:
(a) Explain four ways in, which the use of a computerized payroll system by Ujenzi Ltd, would affect your work as the auditor.
(b) Explain three controls which should be instituted by Ujenzi Ltd to ensure that only authorized persons are allowed access to information on personal files and to input updates for the calculation of wages.
(c) Outline how audit tests could be performed ―around the computer in relation to Ujenzi Ltd‘s payroll
(d) List any two fraudulent activities likely to be perpetrated in relation to Ujenzi Ltd‘s payroll
Date posted:
February 22, 2019
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Answers (1)
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Outline the procedures an external auditor should follow if he suspects that fraud; or error have been perpetrated
(Solved)
Outline the procedures an external auditor should follow if he suspects that fraud; or error have been perpetrated
Date posted:
February 22, 2019
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Answers (1)