Pakistan Institute of Public Summer Exam-2022

Finance Accountants [20.May.2022] [03:30 – 06:15 pm]

Additional time – 15 min for Paper Reading

Audit & Assurance (PS)

CGA | PMAD | PRAD
Marks-80 Subjective Duration: 02 Hours 30 Minutes
[Instructions]
 Ensure that the question paper delivered to you is the same, in which you intend to appear.
 Read the instructions given on the title page of Answer Script.
 Books are not allowed
 Start each question from fresh page.

Attempt FIVE questions including Q. No. 1 which is compulsory

Q.1 Assessment of Internal Controls is one of the main audit procedure adopted by the auditor to
calculate the control risk which in turn is used by auditors in Audit Risk Model to calculate
the overall Audit Risk. To achieve the objective, the auditor has to document the internal
controls.
Required:
Describe various methods of documentation which are: 20
(a) Narrative
(b) Flowchart
(c) Internal Control Questionnaire (ICQ)
(d) Walk-through

Q.2 (a) You are required to state the circumstances in which the auditor gives an unqualified 05
opinion?
(b) The Audit Report contains standard wording with the introductory paragraph, scope 10
paragraph and opinion paragraph. You are required to write a Standard Audit Report.

Q.3 List the factors that should be considered by the auditor in preparing the Audit Risk 15
Assessment form and Inherent Risk Assessment form in the planning file.

Q.4 The Content and Arrangement of the Audit Working Papers reflect the auditor’s proficiency, 15
experience and knowledge. Mention the reasons for adequate documentation of the audit
performed by the auditors.

Q.5 An auditor comes across with a situation where most likely error is less than materiality; 15
upper error limit is greater than materiality, when the auditor come across with such
unacceptable evaluation results, the auditor must take a certain course of action. You are
required to mention the course of action as per guidelines given in the Financial Audit
Manual.

Contd…
 (2)

Q.6 For financial audit purposes, substantive testing is required to determine how much 15
assurance can be placed on financial assertions. The extent of reliance on substantive analysis
procedures depends on certain factors. You are required to briefly discuss those factors.

Q.7 Prepare a questionnaire to assess the internal controls related to data access controls in the 15
entity you are auditing.

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