KNEC| KASNEB| KISM| Study notes and Revision materials for schools in Kenya. KNEC certificate courses, Diplomas, Higher Diplomas, KISM courses cpsp-k and aps-k, KASNEB cpa, atd, cs, cifa, ccp, dcm, cict and cict, Ksce and Kcpe
Loan to three employees Proper authorization for the loan by the responsible official and in accordance with company policy. Supporting evidence as to whether the employees are bonafide employees of the organization. A repayment schedule of the loans. The period of repayment should not exceed the employees term of office Security given by the employees
Fire premiums Examine policy documents issued by the insurance company to make sure that the policy relates to the office block. Verify the receipt issued by the insurance company to ascertain that the amount paid was indeed sh.10, 000.00 Ensure that the policy covers the office block against fire adequately i.e. it has not
Uncertainties result from circumstances in which it is not possible for the auditor to reach any objective conclusion as to the outcome of a situation due to the circumstances themselves or as a result of a limitation on scope of the audit. Such uncertainties are resolved through the passage of time e.g. if the company
During the stocktaking, the main task is to ensure that the clients staff are carrying out their duties effectively. The auditor should: i. Make two-way test counts from stores floor to stock sheets, and from stock sheets to stores floor. ii. Make notes of items counted, damaged stock, instances where the stock taking procedures are
Maintaining the auditors‘ independence is clearly essential if the audit opinion is to have credibility and the confidence of users of financial statements. There are various ways in which the auditor‘s independence is preserved, even given the situation that audit fees are generally fixed by negotiation between the directors of a company and the auditors.
Loan amounting to Sh.30 million Go through the board of directors‘ minutes to ensure that the loan was acquired with proper authority from the board. Ensure that the loan was obtained on behalf of R R Paper Mills and not for a third party. To determine this, seek evidence regarding the utilization of the
Last call on 5,000 ordinary shares at sh.15 per share. Verify that the call has been made in accordance with the terms of the issue. Inspect paid cheques for cash paid on the last call. Inspect any cancelled share certificates for which the company never honoured the last call. Verify that proper authority was obtained
According to ISA 570, factors which would indicate that the going concern assumption of the business entity that he is auditing is threatened include: Financial Indicators Net liability or net current liability position i.e. liabilities exceed assets. Net current liability position i.e. where current liabilities exceed the current assets; Fixed term borrowings approaching maturity without
Before the stock taking, the auditor should carry out the following: – (i) Review prior year‘s working papers, familiarize himself with the nature, volume and location of stocks, consider the controls and recording procedures over stock. (ii) Identify problem areas in relation to the system of internal control and decide whether reliance can be placed
Salesman‟s commissions amounting to Sh.3,000,000 Seek evidence that the salesmen are authorized to sell the company‘s products. Their names should appear in the records for salesmen. Verify the terms of payment of commission. There should be a clearly laid down policy for the payment of commissions. Ensure that commissions are only paid against proof of
