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- Evaluate the competence and independence of the external auditor, especially of the partner who is leading the team. This is important for instance when the auditor involves himself in assisting the client in preparing accounts.
- Probe to find out the nature and extent of issues management and auditors give considerable attention to. The committee should especially wary of the areas of conflict between management and the auditor.
- Address issues to do with hiring and firing of staff. In the event of management hiring former employees of the company‘s audit firm into key positions, the audit committee should look into the matter.
- Keep management on their toes when it comes to implementing the recommendations of both the internal and external auditors.
- Ask and receive frank assessment of the competence of the financial management team.
- Question and enter into discussion with management on key financial policies and the need, if any to alter or review the existing ones.
- The audit committee should be the champions of corporate codes of conduct.
• Act as an effective overseer of the financial reporting process and company internal control
system. E.g. it should be involved in review of company’s internal control procedures.
• Reviews quarterly, semi-annually and yearly financial statements of the company focusing
particularly on any changes in accounting practices, significant adjustments arising from
the audit, the appropriateness of the going concern assumption adopted in preparation of
the financial statements and whether the financial statements comply with IFRSs and other
relevant regulations.
• Consider the appointment of the external auditor, the audit fees charged and any questions
regarding resignation or dismissal of the external auditor.
• Discuss with the external auditor before the audit commences the nature and scope of the
audit and ensure that the work is properly coordinated.
• Review management evaluation of the factors related to independence of the external
auditor. Both the audit committee and the management should assist the external auditor in
preserving his independence.
• Discuss problems and reservations arising from the audit and any matters that the external
auditor may want to discuss.
• Review any communication between the external auditor and management. Such
communication should include management letter issued after the conclusion of the audit.
• The committee considers any related party transactions that may arise within the company
and ensure that related party transactions are appropriately disclosed in the financial
statements in accordance with ISA 24 Related Party Disclosures.
• Consider major findings of any internal investigations undertaken and the management’s
response to the findings.
• The committee has exclusive authority to investigate any matter within its terms of reference
and management must provide access to the necessary information and any resources
required.
• Considers other issues as defined by the board of directors including regular reviews of the
capacity and effectiveness of internal audit function.
Wilfykil answered the question on February 22, 2019 at 12:15
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Explain five circumstances under which an auditor can disclose information to an appropriate authority without client‘s permission
Date posted: February 22, 2019. Answers (1)
- Outline the ways in which an auditor may be held criminally liable in the course of his audit duties(Solved)
Outline the ways in which an auditor may be held criminally liable in the course of his audit duties
Date posted: February 22, 2019. Answers (1)
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Explain the challenges that auditors face in the process of being independent
Date posted: February 22, 2019. Answers (1)
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Suggest how the independence of an auditor may be strengthened
Date posted: February 22, 2019. Answers (1)
- Briefly explain the meaning of the following terms in relation to audit reports:
(i) Except for opinion.
(ii) Disclaimer of opinion(Solved)
Briefly explain the meaning of the following terms in relation to audit reports:
(i) Except for opinion.
(ii) Disclaimer of opinion
Date posted: February 22, 2019. Answers (1)
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Identify and briefly explain any three procedures for obtaining audit evidence.
Date posted: February 22, 2019. Answers (1)
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In the context of the Companies Act (Cap. 486), outline the procedure for the removal of an auditor
Date posted: February 22, 2019. Answers (1)
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Identify the program controls which should be inbuilt in a computerized accounting system
Date posted: February 22, 2019. Answers (1)
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State and control objectives generally associated with the processing of data in a computerized accounting environment.‘
Date posted: February 22, 2019. Answers (1)
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State and briefly explain an auditor‘s responsibilities with regard to the detection of errors and frauds
Date posted: February 22, 2019. Answers (1)
- (i) What is an audit peer review?
(ii) State and briefly explain the objectives of an audit peer review(Solved)
(i) What is an audit peer review?
(ii) State and briefly explain the objectives of an audit peer review
Date posted: February 22, 2019. Answers (1)
- Suggest six control measures that would help reduce the control risk associated with tangible fixed assets.(Solved)
Suggest six control measures that would help reduce the control risk associated with tangible fixed assets.
Date posted: February 22, 2019. Answers (1)
- Explain the assurances that an auditor seeks to obtain in the audit of tangible fixed assets.(Solved)
Explain the assurances that an auditor seeks to obtain in the audit of tangible fixed assets.
Date posted: February 22, 2019. Answers (1)
- Bafu Ltd., a private limited company, manufactures a wide range of bathroom fittings. These fittings are made from steel components which are chromed in small...(Solved)
Bafu Ltd., a private limited company, manufactures a wide range of bathroom fittings. These fittings are made from steel components which are chromed in small vats. The steel components are sourced from outside suppliers. The year end stock mainly consists of these steel components and finished items. As at 31 October 2004, the total stock was valued at Sh. 6,048,000 out of total assets of Sh. 19,200,000. This stock figure was obtained by a physical count as at 31 October 2004, and valuation by reference to purchase invoices and manufacturing cost estimates.
Required:
With reference to each of the matters listed below, state the work you would do to conclude whether the amount attributed to stock is fairly stated.
(a) Quantities
(b) Identification of stock items
(c) Condition of stock items
(d) Cut-off procedures
(e) Valuation of stock
Date posted: February 22, 2019. Answers (1)
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Date posted: February 22, 2019. Answers (1)
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Identify the type of information audit trainees should include in the audit working papers.
Date posted: February 22, 2019. Answers (1)
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Date posted: February 22, 2019. Answers (1)
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Explain the importance of audit working papers.
Date posted: February 22, 2019. Answers (1)
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Identify and briefly explain the statutory and ethical matters you would consider before accepting appointment as an auditor of a company
Date posted: February 22, 2019. Answers (1)
- Identify and briefly explain any four inherent limitations of an internal control system(Solved)
Identify and briefly explain any four inherent limitations of an internal control system
Date posted: February 22, 2019. Answers (1)