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Bse 221: Auditing Theory And Practice Question Paper

Bse 221: Auditing Theory And Practice

Course:Bachelor Of Science In Entrepreneurship Studies

Institution: Moi University question papers

Exam Year:2017

BSE221:AUDITING THEORY AND PRACTICE
INSTRUCTIONS:ANSWER QUESTION ONE AND ANY OTHERTHREE QUESTIONS
QUESTION ONE(28marks)
a)Ken Chacharas a soleproprietor of. a small bakeryhasbeenadvisedthatthe business should have it's
financial statements examined by Certified Public Accountant (CPA). Ken Chacharas, having some book
keeping experience has personally prepared the financial statements of the business and does not understand why
suchfinancialstatementsshoul be examined byaCertified public Accountant.
Required:
i)Describe four ways in which an independentauditmaybebeneficialto Ken Chacharas. (6marks)
ii)Explain to Ken four limitations of an independent audit (6marks)
b)Identify four circumstances under which interim audit would be ideal (6marks)
c)Explain four components of an interim control system (6marks
d)Explain the audit tests the audit would apply to establish the physical qualified of stock and their ownership.
(4marks)
QUESTION TWO(24marks)
a)Explain four reasons organizations regain and disturb profits. (8marks)
b)The audited and published financial statements sent to shareholder are contained in a package of information
known as annual report and financial statements.
Required:
i)Outline the content of annual report and financial statements. (8marks)
ii)Describe the auditor's responsibilities with content identified in(a)(i)above. .(8marks)j
QUESTION THREE:(24marks)
a)Explain how a computerized accounting system,would be actualized under the following:
i)Auditing around the computer. (6marks)
ii)Auditing through the computer. (6marks)
b)Explain six contents of an unqualified audit report. (6marks)
c)Explain the significance of specialised audits in efficient financial management System (6marks)

QUESTION FOUR(24marks)
a)Compare and contrast the auditing and investigation reports. (12marks)
b)Explain the meaning of corporate. governance and outline the possible sources of fraud (12marks)
QUESTION FIVE(24marks)
a)Explain the following terms in context of auditing;
i)Audit program (4marks)
ii)Audit trail (4marks)
iii)Audit check (4marks)
b)Explain the significance of verification of balancesheet in the preparation and presentation of financial statements
of entity. (12marks)
END

Bse 221: Auditing Theory And Practice Question Paper

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