QUESTION ONE

1. “ The auditor should adequately plan, control and record his work’ Why is audit planning considered so important? (8 marks)
2. The most effective plan is one that is reduced in writing in a planning memorandum. Name four items that should be included in this memorandum (4 marks)
3. Suggest the practical problems, which are encountered in implementing audit planning and how you would endeavor to minimize these. (8 marks)

(Total 20 Marks)

QUESTION TWO

1. What is audit documentation? (2 marks)
2. What are standardized working papers and what are their advantages? (6 marks)
3. What is quality control (12 marks)

(Total 20 Marks)

QUESTION THREE

ISA 500 Audit Evidence requires that ‘auditors should obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion’. The standard identifies five procedures for obtaining audit evidence and also gives guidance on assessing the reliability of audit evidence.

Required:

1. Identify and describe the procedures for obtaining audit evidence. (5 marks)
2. For each of the procedures, describe an audit test using that procedure to obtain evidence as to the balance of plant and machinery including the related balances of accumulated depreciation and charges to profit and loss. (5 marks)
3. For each of the procedures, discuss considerations affecting your judgement as to the reliability of the evidence with particular reference to the tests described in your answer to (b). (10 marks)

(Total 20 Marks)

QUESTION FOUR

Outline the benefits that can be derived by an auditor from the successful employment of statistical sampling techniques as opposed to non- statistical sampling. (Total 20 Marks)

QUESTION FIVE

Write short notes on the following:

1. Materiality (5 marks)
2. Control environment (5 marks)
3. Control risk (5 marks)
4. True and fair view (5 marks)
5. Peer review (5 marks)

(Total 20 Marks)