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Auditing I Question Paper
Auditing I
Course:
Bachelor Of Commerce
Institution:
Kca University question papers
Exam Year:
2009
UNIVERSITY EXAMINATIONS: 2009/2010
THIRD YEAR STAGE I EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CAA 203-A: AUDITING I
DATE: DECEMBER 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE (20 MARKS)
(a) The following is stated in the audit report on the accounts of a company.
‘We have audited the accounts set out on pages---- to---. The accounts are in agreement with the books of accounts. We obtained the information and explanations we required in relation to the matter referred to in paragraph 3----. In view of our examination made---- we are of the opinion that the balance sheet gives a true and fair view-----‘.
Identify this type of a report and explain under what circumstances can an auditor express such an opinion? (12 Marks)
(b) Describe the main qualities of an auditor. (8 Marks).
QUESTION TWO (20 MARKS)
Explain the steps involved in the conduct of an independent audit. (20 Marks)
QUESTION THREE (20 MARKS)
(a) You have been appointed by Mr. Hosea, a sole trader to audit the books of accounts of his retail shop in Nairobi West.
(i) Explain this type of an audit and the steps the auditor should undertake before accepting the audit.
(ii) Highlight five advantages Mr. Hosea will gain from this audit. (10 Marks).
(b) Distinguish between Continuous Audit and Interim Audit? (10 Marks)
QUESTION FOUR (20 MARKS)
In order to form a reliable opinion, the auditor needs to gather sufficient and reliable evidence’.
Discuss the various sources of audit evidence and explain what evidence is more reliable.
(20 Marks)
QUESTION FIVE (20 MARKS)
‘It is important for the auditor to maintain an independent position as regards to his/her clients’. –
Explain. What legal and professional provisions exist to ensure that this independence is maintained by the auditor? (20 Marks)
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