Under the provisions of the Companies Act, a private company is any company whose articles of association:
Limit the number of members to 50 excluding current and former employeeswho are members.
Restrict the right to transfer its
Prohibit any invitation to the public to subscribe for its shares or
Other Characteristics include:
Has at least one
Entitled to commence business from the date of
Not obliged to hold the statutory
Not obliged to publish accounts.
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List four advantages to a company of having its accounts audited
Your firm of accountants has been the auditors of Leather Merchants Limited, a company that exports both raw and semi-finished leather products to European and Asian markets. The company has decided to introduce a comprehensive computer system to manage its accounting and administrative functions. Required: Outline the practical difficulties you would encounter as an auditor as a result of the proposed introduction of a computerized accounting system and Explain how you would overcome the difficulties identified in above
Explain how auditors distinguish their responsibility from those of the directors in respect of financial statements
Your firm of accountants has been the auditors of Leather Merchants Limited, a company that exports both raw and semi-finished leather products to European and Asian markets. The company has decided to introduce a comprehensive computer system to manage its accounting and administrative functions. Required: Identify and explain the benefits that the company would derive as a result of putting in place a comprehensive computerized accounting system
State the evidence, which you, as the auditor, would like to find in place and pay attention to when vouching the following payments made by RR Paper Mills Ltd., during the financial year ended 31 October 2002 ; Loans to three employees totaling Sh. 6 million
State the evidence, which you, as the auditor, would like to find in place and pay attention to when vouching the following payments made by RR Paper Mills Ltd., during the financial year ended 31 October 2002. Fire insurance premiums amounting to Sh. 10, 000 paid for the office block
Explain the meaning of each of the following terms in relation to audit reports: Circumstances of uncertainty and Circumstances of disagreement
A very important aspect of the audit of the financial statements by an external auditor is the observation of the physical stocktaking. Required: Explain the audit tests that the auditor would apply to establish the physical qualities of stock and their ownership
The National Metal Works Limited manufactures and retails door and window frames. The company recently dismissed their external auditors. The directors have approached your firm of accountants to act as their auditors and the directors have proposed a fee of KShs. 1, 000, 000 plus a bonus of 1% of profits after tax. Required: Explain the implications of fixing the audit fee by negotiation between the directors and the external auditors on the independence of the auditor
State the evidence, which you, as the auditor, would like to find in place and pay attention to when vouching the following payments made by RR Paper Mills Ltd., during the financial year ended 31 October 2002. A loan amounting to Sh. 30 million obtained from a local bank and secured by the factory building
