Part I: General Instruction

 The questions are organized in to two parts. Part I: Introduction to auditing, Part
II: Instruction to find accounting.
 Read and attempt all questions
 Your answer should be clear and relevant to the questions and shouldn’t exceed 20
pages.
 You should write the name and ID No of each members of the group. You should
also write your campus.
 For any difficulty, you can contact the following instructors
1. Ato Tesfahun Kumilachew Mob. 0911-691996
2. Ato Solomon Yirgalem Mob. 0911-143207
3. Ato Kiros T/himanote Mob. 0911-542237

Introduction to Auditing
1. Describe what internal control is? Identity it’s components and gives brief
explanation of each component. How auditors obtain understanding about internal
controls and what are the devices used to document this understanding. Describe the
purpose of obtaining adequate understanding of internal controls.
Describe the control objectives and the basic control procedures over the following
items.
 Cash
 Receivables /sales
 Inventories /Purchases
2. Describe the applicability of compliance audit test and substantive audit test.
Describe the basic activities conducted during substantive test for audit of cash,
Receivables and inventories.
3. Identify the basic elements of standard audit report and describe the condition that
deals auditors to express the following opinions in the report.

 Unqualified opinion
 Adverse opinion
 Qualified opinion
 Disclaim of opinion