(i) Petty cash balance
- The auditor should verify that the petty cash float is not allowed to contain expenses supported by IOUs unless these have been authorized by a responsible official.
- Verify the use of petty cash control account in the general ledger.
- Verify that petty cash vouchers for which payment has been made bear the 'paid‘ stamp.
- For substantial petty cash transactions, the auditor should check whether there are supporting documents attached
(ii)Revaluation Reserve
- Whether the revaluation was carried out on assets that have actually in existence for a considerable period of time.
- In the case of land, the new value of land leading to the revaluation must have been certified by experts in the field i.e. land valuers and certificate of valuation availed to the auditor.
- The auditor should probe to find out more information where exorbitant amounts of money have been transferred to the reserve account.
- The auditor should check to find out the frequency of revaluation; revaluations carried out after every other year should be probed into.
(iii)Copyrights
- The existence of Copyrights should be verified by examining the actual copyright and it should be seen that the same has been duly registered.?
- If the copyright has been purchased, the assignment should also be seen together with a receipt for the purchase consideration.?
- The copyright register should be inspected to see that the copyright has been included therein.?
- It should be verified that the copyright is carried in the books at cost less depreciation. The registration cost should form part of the cost while periodic renewal fee paid should be charged in the profit and loss account.?
- In case of joined registration of a copyright, registered assignment by the other party should be examined. The copyright may otherwise be subjected to litigation about its title
Wilfykil answered the question on February 22, 2019 at 13:10
- Cash in hand and cash at bank are commonly referred to as liquid assets. Because of this liquidity, these assets represent the most vulnerable of...(Solved)
Cash in hand and cash at bank are commonly referred to as liquid assets. Because of this liquidity, these assets represent the most vulnerable of all the assets of an entity. You have recently been employed by Korir and Associates (Certified Public
– Accountants) as an audit assistant. During your first audit assignment at Viwanda Ltd you have been allocated the audit of cash in hand and cash at bank.
Required
(i) State and explain any the audit procedures you would undertake in order to determine whether or not there has been any misappropriation of cash.
(ii) Explain any five controls over cash you would expect to be instituted by a business entity in order to minimize cases of embezzlement of cash
Date posted: February 22, 2019. Answers (1)
- The auditor should prepare working papers which are sufficiently complete and detailed to provide an overall understanding of the audit.(Solved)
The auditor should prepare working papers which are sufficiently complete and detailed to provide an overall understanding of the audit.
Required:
(a) State four benefits that an auditor would obtain from working papers that satisfy the above requirement.
(b) List five items of information you would expect to be contained in a permanent audit file and explain why each of these items of information should be readily available.
(c) In the audit or purchases, list four examples of the type of information that would be contained in the detailed audit working papers.
(d) Give any two reasons why a director should examine the directors‘ minute book
Date posted: February 22, 2019. Answers (1)
- Explain five circumstances under which an auditor can disclose information to an appropriate authority without client‘s permission....(Solved)
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)
- Briefly explain the methods which an auditor might use to ascertain a client‘s internal control system.(Solved)
Briefly explain the methods which an auditor might use to ascertain a client‘s internal control system.
Date posted: February 22, 2019. Answers (1)
- State the factors that the external auditor should consider before placing reliance on the work of the internal auditor(Solved)
State the factors that the external auditor should consider before placing reliance on the work of the internal auditor
Date posted: February 22, 2019. Answers (1)
- Outline and briefly explain the procedures that the internal auditor can conduct on behalf of the external auditor.(Solved)
Outline and briefly explain the procedures that the internal auditor can conduct on behalf of the external auditor.
Date posted: February 22, 2019. Answers (1)
- Identify and explain the functions of the internal audit department in an organization.(Solved)
Identify and explain the functions of the internal audit department in an organization.
Date posted: February 22, 2019. Answers (1)
- List and briefly explain the main functions of an audit committee(Solved)
List and briefly explain the main functions of an audit committee
Date posted: February 22, 2019. Answers (1)
- Explain five circumstances under which an auditor can disclose information to an appropriate authority without client‘s permission(Solved)
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)
- Explain the challenges that auditors face in the process of being independent(Solved)
Explain the challenges that auditors face in the process of being independent
Date posted: February 22, 2019. Answers (1)
- Suggest how the independence of an auditor may be strengthened(Solved)
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)
- Identify and briefly explain any three procedures for obtaining audit evidence.(Solved)
Identify and briefly explain any three procedures for obtaining audit evidence.
Date posted: February 22, 2019. Answers (1)
- In the context of the Companies Act (Cap. 486), outline the procedure for the removal of an auditor(Solved)
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)
- Identify the program controls which should be inbuilt in a computerized accounting system(Solved)
Identify the program controls which should be inbuilt in a computerized accounting system
Date posted: February 22, 2019. Answers (1)
- State and control objectives generally associated with the processing of data in a computerized accounting environment.‘(Solved)
State and control objectives generally associated with the processing of data in a computerized accounting environment.‘
Date posted: February 22, 2019. Answers (1)
- State and briefly explain an auditor‘s responsibilities with regard to the detection of errors and frauds(Solved)
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)