Faculty of Business Management

BAC 215 : Auditing

Date: 16th May 2022 to 27th May 2022 Time: 9:00am – 12:00pm

INSTRUCTIONS TO CANDIDATES
This paper contains two sections A and B.
Section A is compulsory carries 40 marks, attempt any one questions from section B
A total of TWO questions should be attempted.

Read the following before answering the examination questions.

1. Question 1 is compulsory
2. Read each question carefully before you answer.
3. Apportion your time according to the marks allocated for the question.
4. Apportion your time equally between Section A and B.
5. Firstly answer the questions that you feel can obtain the most marks for you but, if there
are any compulsory questions, you must ensure that you attempt these.
6. Number the answers to the questions clearly before answering.
7. Please write as neatly as possible as illegible handwriting cannot be marked.

SECTION A

Q.1

a) Cavendish University has approached and entrusted you with the responsibility of
auditing their books of accounting to determine their way forward whether to review
and start more programs or shelf the unpopular ones .ISA 230 Audit documentation
requires an auditor to prepare audit documentation for an audit of financial statements
on a timely basis.

Required:

i. Prepare your how you are going to approach this work (10 marks)
i. Assist them to validate the main contents for a “permanent audit file” and “current file
audit file” (8 marks)
ii. Describe the benefits of documenting audit work. (10 marks)
 iii. Advise them on the key internal control system they can adopt for better performance
(12 marks)
iv. Explicate the potentials of good working papers for their entity (8 marks)

SECTION B

Q.2

In forming an audit opinion, the auditor need not examine all the information that is available
to him. He can reach a conclusion about an account balance, class of transactions or a control
by way of sampling.

Required:

i. Explain why an auditor needs to adopt a sampling approach in his work. (4 marks)
ii. Describe the various methods of sampling that can be used by auditors. (16
marks)
iii. Identify situations where the auditor would be unlikely to use sampling techniques.
(10
marks)
Q.3 Auditors have various rules regulation and policies which guide their flow of work in
general the auditing standards; in your expertise as an auditing adept

a) Discuss the role of the ICPAU to the accounting professionals (8 Marks)

b) Describe the current gaps in auditing that may require reforms to improve on the
auditor’s practice (15 marks)
c) How can the expectations gap between the public and the auditors be addressed? (7
marks)

SUCCESS