You have been appointed the auditor of Jenga Nyumba Building Society which has branches in all the major towns in Kenya. The head office and all the branches are fully computerised.
You are required to list down the aspects of controls which are of particular relevance to building societies in addition to controls common to other banking and non-banking financial institutions. In each case state the objectives of every control and show how it can be strengthened.
Your firm has been appointed to a joint audit with another firm of Certified Public Accountants of Kenya. In case of joint audits:
(a) Discuss the procedures usually followed in conducting an audit by more than one firm of accountants and the division of work between them.
(b) Discuss the general advantages and disadvantages of joint audits.(20 marks)
(a) The expressions "management audit, operational audit, and efficiency audit" are very often used these days.
Do they differ from internal audits? If so, to what extent?
(b) Write short notes on "Value for Money audits" with a special reference to government and quasi-government bodies.(20 Marks)
(a) Describe briefly the responsibility of the auditors of a holding company when reporting upon group accounts which incorporate the accounts of subsidiary and associated companies of which have not been audited by them (3 Marks)
(b) Detail the principal matters which must be considered by the auditors before placing reliance on accounts not audited by them. (9 Marks)
(c) The auditors of the holding company usually prepare questionnaires to be completed by the outside firms of auditors. Suggest eight important matters relating to accounting policies or scope of the audit which would be included in the questionnaire under the section on stock and work-in-progress.
(Total: 20 Marks)
What details require examination by the Accountant with regard to the lawyers’ records?