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Hbc2214:Auditing I Question Paper

Hbc2214:Auditing I

Course:Bachelor Of Commerce

Institution: Meru University Of Science And Technology question papers

Exam Year:2011

QUESTION ONE – (30 MARKS)
concept explain:
(a) Why it is fundamental for the auditor to be independent in duty performance. (2 Marks) (b) What are some of the likely threats to the independence of the auditor. (8 Marks) (c) Highlight, key audit activities/process that the auditor should be seen to be thoroughly independent. (3 Marks) (d) How can the auditors overcome the threats to their independence in (b) above. (8 Marks) (e) Who qualifies to be an auditor of a corporation and why. (6 Marks) (f) How can an auditor be removed from office. (3 Marks)
QUESTION TWO – (25 MARKS)
In handing over judgment as the dissolution of Simba Corporation, the Lo it is the duty of the corporations to keep proper books of accounts and to prepare acceptable accounts reports and financial statements, free from errors and other material mistakes. In reference to the above observations by the Lord justice, highlight:
(a) The purpose of accounting. (3 Marks) (b) Factors in an organization that may provide weakness for thrive of errors and frauds. (4 Marks)
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(c) The duties and responsibilities of auditors, and of directors of a company. (10 Marks) (d) Explain the difference between internal audit and continuous audit. (3 Marks)
QUESTION THREE – (20 MARKS)
In the financial year 1989/1990 the government recalled all internal auditors from the ministries since they were not working according to the then powerful Permanent Secretary in the office of the president. However in his report, David, then controller and Auditor, general noted that the government lost close to 75 billion shillings in dubious and fraudulent activities/transactions. In response to the above:
(a) Define internal audit. (2 Marks) (b) Outline the functions of an internal audit. (7 Marks) (c) In what circumstances would an external auditor rely on internal audit reports. (3 Marks) (d) Highlight the qualities of good internal controls in an organization that can be effective in safeguarding misuse and abuse of use of assets. (8 Marks)
QUESTION FOUR – (20 MARKS)
Explain the meaning of following audit terms
(a) Audit working papers (4 Marks) (b) Audit evidence (4 Marks) (c) Materiality (4 Marks) (d) Qualified audit reports (4 Marks) (e) Substantative tests (4 Marks)

Hbc2214:Auditing I Question Paper

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