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Auditing Ii Question Paper

Auditing Ii

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2008

UNIVERSITY EXAMINATIONS: 2008/2009
SECOND YEAR STAGE 1 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CAA 300: AUDITING II
DATE: DECEMBER 2008 TIME: 2 Hours
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a. List and briefly describe the circumstances when an auditor may be liable to third
parties for damages for material misstatements in audited published accounts.
(5 Marks)
b. Briefly explain how an auditor may minimize his liability. (10 Marks)
c. List and briefly explain the functions/duties of audit committees. (10 Marks)
d. Present the arguments for statistical sampling in auditing. (5 Marks)
QUESTION TWO
Events or transactions arising after the balance sheet date are very important to the auditor:
Required:
a. Give examples and types of such events and transactions. (4 Marks)
b. Explain the responsibility of the auditor in respect of events or transactions
occurring between.
i. The dates the accounts are approved and signed by the board and the sale
the accounts are signed by the auditor.
ii. The date the accounts are signed by the auditor and the date of the Annual
General Meeting.
iii. The end of a financial year and the completion of the audit fieldwork.
2
iv. The end of the audit fieldwork and the date the account the date are
approved and signed by the board. (16 Marks)
QUESTION THREE
Internal controls over computer based accounting systems are considered under application
controls and general controls.
a. Differentiate with examples the two types of controls. (10 Marks)
b. Test Packs and Computer audit programs are computer assisted auditing techniques.
Differentiate between the two and also give examples of their use.
(10 Marks)
QUESTION FOUR
The examinations of evidence are fundamental to the audit process. SAS 400 audit
evidence states that: “the auditors should obtain sufficient appropriate audit evidence to be
able to draw reasonable conclusions on which to base the audit opinion.” Evidence is
available to the auditors from sources under their own control, from the management of the
company and from third parties. Each of these sources presents the auditors with differing
considerations as to the quality of the evidence so produced.
Required:
a. Discuss the quality of the following types of audit evidence, giving two examples of
each form of evidence.
i. Evidence originated by the auditors
ii. Evidence created by third papers
iii. Evidence created by the management of the client (15 Marks)
b. Describe the general considerations which the auditors must bear in mind when
evaluating audit evidence. (5 Marks)
QUESTION FIVE
a. Discuss the reasons as to why Kenya adopted the International Accounting
Standards. (5 Marks)
b. Define materiality and state how it affects audit risk. (5 Marks)
c. What effect does materially have of tests on control? (3 Marks)
d. Elaborate on the factors that affect materiality. (7 Marks)

Auditing Ii Question Paper

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