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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)
a) (i) What is fraud? (2 Marks) (ii) List three common types of frauds (3 Marks) b) What is an audit? (2 Marks) c) Distinguish between auditing and accounting (6 Marks) d) What are the requirements for one to practice as an auditor in Kenya (3 Marks) e) Outline the stages involved in carrying out an audit (8 Marks) f) Explain any three types of internal controls that can be used in the Examination department. (6 Marks)
QUESTION TWO (20 MARKS)
a) hat is an “interim audit” (2 Marks) b) Identify any four circumstances under which an interim audit would be ideal (4 Marks) c) List and briefly explain five disadvantages of an interim audit (10 Marks) d) Suggest solutions to any four disadvantages you have identified in ( c) above. (4 Marks)
QUESTION THREE (20 MARKS)
a) Explain the meanin of the audit eidence. (4 Marks) b) Write a brief explanatory notes on the following terms in relation to audit evidence: (i) Relevance. (2 marks) (ii) Reliability. (2 Marks) (iii) Sufficiency. (2 Marks) c) Describe the various procedures of obtaining audit evidence giving an example of each by way of illustration. (10 Marks)
QUESTION FOUR (20 MARKS)
a) You have been appointed the auditor of United Millers Company Limited, a medium manufacturing company which is quoted on the stock exchange. Required: (i) List the important matters which must be included in the letter of engagement. (14 Marks) (ii) Explain the purpose of such a letter. (6 Marks)
QUESTION FIVE (20 MARKS)
a) The director of one of your growing clients have decided to create an internal audit function in their organizational structure. Required: (i) List and briefly describe the duties you would expect the internal audit staff to perform. (10 Marks) (ii) List and explain the criteria which would consider before deciding to rely on the work of the internal audit function. (5 Marks) (iii) State the extent to which you, as an external auditor, can rely on the work of the internal audit function. (5 Marks)

Hbc2214:Auditing I Question Paper

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