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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
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. The last call on 5, 000 ordinary shares at Sh, 15 per share
Explain five factors which would indicate to the auditor that the going concern assumption of the business entity he is auditing is threatened
A very important aspect of the audit of the financial statements by an external auditor is the observation of the physical stocktaking. Required: List four procedures that an auditor would need to undertake prior to attending a company‘s stock-take
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. Salesmen‘s commissions amounting to Sh. 3, 000, 000
A very important aspect of the audit of the financial statements by an external auditor is the observation of the physical stocktaking.Required: Why does the auditor need to attend a stock-take of the company that he audits?
You are a senior member of the audit team at Grain Millers Ltd., a company whose business is milling maize, wheat and other products for local consumption. The annual turnover for the year ended 30 September 2002 amounted to Sh. 1.5 million and most of its sales were on credit.The audit team leader has assigned you the audit of the provision for bad and doubtful debts which has been set at Sh. 4.75 million; out of which Kshs 3.25 million relates to the provision against specific bad and doubtful debts and the balance of Sh. 1.5 million is a general provision determined as a percentage of overdue debtors with a higher percentage being applied against the longest overdue accounts. Required: What is meant by the following terms as used in auditing: Cut off procedure? and Audit in depth?
