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(a) Statutory disclosures that an auditor is required to make:-
• The auditor's should state whether he has obtained all the information and explanations,
which to the best of their knowledge and belief were necessary.
• The auditor should also state whether in his opinion, proper books of account have been
kept by the company.
• Whether the company's balance sheet and profit and loss account dealt by the report are
in agreement with the books of accounts and returns.
• Whether, in his opinion and to the best of their information the financial statements give a
true and fair view.
• In the case of a holding company submitting group financial statements whether in their
opinion, the group financial statements have been properly prepared and give a true and
fair view.
(b) Circumstances giving rise to disagreements include:-
• Application of inappropriate accounting policies by management.
• Disagreements on amounts and facts included in the financial statements.
• Disagreement on interpretation of an accounting standard or even legislation.
• Disagreement as to the manner or extent of disclosure of facts or amounts in the financial
statements.
• They can disagree on the mode of the disclosure of information.
• Inconsistency of accounting policies.
Kavungya answered the question on May 15, 2019 at 08:46
- In the context of computer based accounting systems:
a) Identify and explain the program controls which are developed to minimise errors in the
processing of records.
b) Highlight...(Solved)
In the context of computer based accounting systems:
a) Identify and explain the program controls which are developed to minimise errors in the
processing of records.
b) Highlight two types of computer files which are used for the processing of data.
c) Summarise the ways in which an auditor could use a file interrogation software in the
course of his/her audit work.
Date posted: May 15, 2019. Answers (1)
- Analyze the distinguishing features of computer based systems which an auditor must
consider in an audit engagement.
i) Define the term "test data".
ii) Explain three ways of...(Solved)
Analyze the distinguishing features of computer based systems which an auditor must
consider in an audit engagement.
i) Define the term "test data".
ii) Explain three ways of using test data in an audit.
Date posted: May 15, 2019. Answers (1)
- a) Explain the two main types of computer assisted audit techniques.
b) Argue the case for and against a company outsourcing its electronic data processing to...(Solved)
a) Explain the two main types of computer assisted audit techniques.
b) Argue the case for and against a company outsourcing its electronic data processing to a
computer bureau.
Date posted: May 15, 2019. Answers (1)
- Outline six benefits that could be derived from using Computer Assisted Audit techniques
(CAATs)(Solved)
Outline six benefits that could be derived from using Computer Assisted Audit techniques.
(CAATs)
Date posted: May 15, 2019. Answers (1)
- Identify six controls that could be instituted in a new computer based accounting system to
prevent unauthorized changes to data files.(Solved)
Identify six controls that could be instituted in a new computer based accounting system to
prevent unauthorized changes to data files.
Date posted: May 15, 2019. Answers (1)
- Explain six ways in which audit software could be used in an audit.(Solved)
Explain six ways in which audit software could be used in an audit.
Date posted: May 15, 2019. Answers (1)
- Jikaze Limited operates a computerised purchases system. Invoices and credit notes are posted to
the purchases ledger by the purchases department. The computer subsequently raises a...(Solved)
Jikaze Limited operates a computerised purchases system. Invoices and credit notes are posted to
the purchases ledger by the purchases department. The computer subsequently raises a cheque
when the invoice is due for payment.
Required:
Describe five controls that should be in operation over the addition, amendment and deletion or
suppliers in the computer system.
Date posted: May 15, 2019. Answers (1)
- a) During an audit. the auditor uses a combination of compliance tests or control, analytical
procedures and detailed substantive procedures. When the information system is computer
based,...(Solved)
a) During an audit. the auditor uses a combination of compliance tests or control, analytical
procedures and detailed substantive procedures. When the information system is computer
based, the detailed tests involve the use of manual techniques and computer audit
programs.
Required:
Explain three manual techniques that an auditor could use in the audit of a computer based
information system.
(b) An audit trial can be described as a series of cross-references that enable the auditor to
Follow a transaction from cradle to grave and vice versa and to check the operations
performed at each stage of processing.
The transformation from manual accounting systems to fully computer based information
systems has led to the loss of audit trail such that audit trials are often now:
• Available in machine readable form only or
• Retained only as long as is necessary for the system to verify the transaction.
Required:
Explain the different ways auditors overcome these problems of loss of audit trail.
Date posted: May 15, 2019. Answers (1)
- Briefly explain the following types of audit software
i) Generalised audit software.
ii) Purpose written programs.
iii) Utility programs.(Solved)
Briefly explain the following types of audit software
i) Generalised audit software.
ii) Purpose written programs.
iii) Utility programs.
Date posted: May 15, 2019. Answers (1)
- Summarise ten benefits that could accrue to the auditor from automating audit procedures(Solved)
Summarise ten benefits that could accrue to the auditor from automating audit procedures
Date posted: May 15, 2019. Answers (1)
- Application controls in confirmation technology are designed to ensure the integrity of the
accounting records. They relate to procedures used to initiate, record, process and report
transactions...(Solved)
Application controls in confirmation technology are designed to ensure the integrity of the
accounting records. They relate to procedures used to initiate, record, process and report
transactions or other financial data.
Date posted: May 15, 2019. Answers (1)
- a) Define the term "live data" as used when auditing through the computer.
b) Describe three disadvantages of using live data testing(Solved)
a) Define the term "live data" as used when auditing through the computer.
b) Describe three disadvantages of using live data testing
Date posted: May 15, 2019. Answers (1)
- a) Discuss. four matters that an auditor should take into consideration in determining
whether or not to use Computer Aided Audit Techniques (CAATs).
b) Describe three practical...(Solved)
a) Discuss. four matters that an auditor should take into consideration in determining
whether or not to use Computer Aided Audit Techniques (CAATs).
b) Describe three practical ways in which auditors might use laptops in the audit work. .
c) Explain three controls that auditors should implement when using laptops during audits.
Date posted: May 15, 2019. Answers (1)
- a) Distinguish between "vouching" and "verification".
b) Outline the audit procedures you would carry out to verify the following items
appearing in the financial statements of a...(Solved)
a) Distinguish between "vouching" and "verification".
b) Outline the audit procedures you would carry out to verify the following items
appearing in the financial statements of a client:
i) Cash in Hand,
ii) Loan to an employee.
iii) Fire insurance premium on factory building,
iv) Sales commission paid to an agent.
Date posted: May 15, 2019. Answers (1)
- a) During the audit of cash in bank, an auditor should seek to obtain standard bank
confirmations from each-hank with which the client conducted business during...(Solved)
a) During the audit of cash in bank, an auditor should seek to obtain standard bank
confirmations from each-hank with which the client conducted business during the period
under audit.
Required;
i) Explain the importance of an auditor obtaining confirmations from the client's bank.
ii) Outline the steps followed by an auditor when obtaining confirmations from the
client's bank.
b) Describe the audit procedures an auditor would carry out when verifying a client's bank
reconciliation.
Date posted: May 14, 2019. Answers (1)
- "An auditor i:., required to use assertions for classes of transactions, account balances and
presentation and disclosure in sufficient detail in order to form a basis...(Solved)
"An auditor i:., required to use assertions for classes of transactions, account balances and
presentation and disclosure in sufficient detail in order to form a basis for the assessment of risks
of material .misstatement and the design:and performance of further audit-procedures"'.
Required:
Identify the assertions used by auditors in the following categories:
i. Assertions about account balances at the period end
ii. Assertions about presentation and disclosure.
Date posted: May 14, 2019. Answers (1)
- Summarise the audit work you would undertake to obtain reasonable assurance that the
following items appearing the Statement of financial position of a client are not...(Solved)
Summarise the audit work you would undertake to obtain reasonable assurance that the
following items appearing the Statement of financial position of a client are not materially
misstated:
i. Specific allowance for doubtful debts.
ii. Trade payables.
Date posted: May 14, 2019. Answers (1)
- Explain how an auditor would carry out the verification of cash at bank.(Solved)
Explain how an auditor would carry out the verification of cash at bank.
Date posted: May 14, 2019. Answers (1)
- For each of the following items in the financial statements, identify five forma of third party
evidence that the auditor would rely on.
i. Land
ii. Rent expenses
iii....(Solved)
For each of the following items in the financial statements, identify hvo.forins of third party
evidence that the auditor would rely on.
i. Land
ii. Rent expenses
iii. Motor vehicles
Date posted: May 14, 2019. Answers (1)
- Highlight six audit procedures that you would carry out to verify an acquisition of plant worth
Sh.2 million during the financial year.(Solved)
Highlight six audit procedures that you would carry out to verify an acquisition of plant worth
Sh.2 million during the financial year.
Date posted: May 14, 2019. Answers (1)