CPA Advanced Level – Advanced Auditing And Assurance Revision Kit



Complete copy of CPA ADVANCED AUDITING AND ASSURANCE Revision Kit is available in SOFT copy (Reading using our MASOMO MSINGI PUBLISHERS APP) and in HARD copy 

Phone: 0728 776 317



Topic 1: Assurance and non-assurance engagements 

  • The concept of assurance and non-assurance engagements
  • Engagement letters for assurance and non-assurance engagements
  • Agreed upon procedures
  • Compilation engagements
  • Types of assurance reports
  • Key Audit Matters
  • Different types of audit opinions based on audit evidence gathered
  • Entities/Companies that are exempt from audit in Kenya.

Topic 2: Audit framework and regulations

  • Objective and general principles of auditing
  • Legal framework
  • International, regulatory framework for audit and assurance services
  • Auditors’ professional liability and legal responsibilities

Topic 3: Professional and ethical considerations

  • Code of ethics for professional accountants in line with International Ethics
    Standards Board for Accountants’ Code of Ethics for Professional Accountants
    (IESBA Code)
  • Fundamental principles, threats and safeguards
  • Advertising, publicity, obtaining professional work and fees and money laundering
  • Professional skepticism (in the context of errors and fraud) – Professional Liability.

Topic 4: Management of audit practice

  • Client acceptance and retention
  • Tendering for audit services for public listed entities and nonpublic entities
  • Professional appointments for public listed entities and nonpublic entities
  • Planning and performing audits. The concept of materiality and assessing risk of
    Identify significant risks as outlined in International Standards on
  • Methods and techniques of auditing high risk areas.
  • Use and evaluation of internal control system by auditors to address audit risks
  • Use of technological tools (data analytics) to analyze and evaluate audit evidence
    gathered during the audit and how it addresses risk of misstatement.
  • Preparation and retention of audit working papers as required by the Companies
  • Archiving of audit files.


Topic 5: Audit evaluation and reviews

  • Audit assertions and how to identify the relevant assertions during the audit
  • Subsequent events. Audit work done between financial year end and date of
    signing the financial statements.
  • Going concern assumption as a financial statement risk
  • Related parties. Risks associated with related parties. Process of identifying
    related parties by management. Disclosure of related parties in the management
    representation letter and in the financial statements
  • Drafting management letter representation
  • Group audit/joint/component audit. Preparation of group reporting instructions to component auditors
  • Analytical review
  • Evidence and testing considerations
  • Using the work of others such as internal auditors, other experts (tax, actuaries,
    valuers, lawyers etc.) and another auditor
  • The company audit
  • Audit of consolidated financial statements
  • Audit of banks and non-banking financial institutions
  • Audit of general insurance companies
  • Audit of cooperatives societies(SACCOs)
  • Audit under taxation laws
  • Other special audit assignments
  • Role of Audit Committee in the audit process


Topic 6: Audit related assurance services

  • Prospective financial information, investigations and due diligence
  • Special audit assignments (social and environment audit)
  • Operations and internal audit management
  • Audit under computerised information systems. Identification and testing of
    relevant IT general controls (ITGC) during an audit – Audit of public sector
    undertakings – Integrated reporting
  • Audit of performance information (predetermined objectives) in the public sector
  • Special aspects of auditing in an automated environment.


Topic 7: Forensic accounting

  • Difference between a statutory audit and a forensic audit
  • Conduct of forensic investigations: accepting the investigation, planning, evidence
    gathering, reporting
  • Rules of evidence in court proceedings
  • Regulations and standards on forensic accounting
  • Applicable codes of ethics


Topic 8: Concluding and reporting

  • Quality control and peer review
  • Reports to those charged with governance/Board of directors – Management letterissues identified during the audit process
  • Reporting on compliance and other information (Chairman’s statement and
    directors report) and for listed entities, reporting on remuneration report for the
    directors – Auditors report on financial statements – Reporting on other


Topic 9: Regulatory Environment

  • International regulatory frameworks for audit and assurance services.
  • Money Laundering
  • Laws and regulations
  • Other Regulators with interest in the audit space in Kenya such as Central Bank
    of Kenya, Insurance Regulatory Authority, Capital Market Authority and Retirement
    Benefit Authority and their requirements


Topic 10: Contemporary issues and emerging trends

  • Professional and ethical developments
  • Other current issues
  • Effects of pandemics on audit processes. The concept of remote auditing and
    additional procedures put in place to obtain sufficient audit evidence.







November 2018 Question Four B

Discuss the objective of a review engagement contrasting the level of assurance provided with that of an audit of financial statements.       (4 marks)



Objective of a review engagement contrasting the level of assurance provided with that of an audit of financial statement.


May 2018 Question Two B

Contrast the scope of due diligence investigations with that of an audit of financial statements.     (6 marks)



Scope of due diligence investigations with that of an audit of financial statements


December 2017 Question Two A

The framework for assurance engagements does not permit an auditor to give an absolute level of assurance.

With reference to the above statement, suggest five reasons why it is not possible to give an absolute level of assurance.     (10 marks)



Reasons why it is not possible to give absolute level of assurance

  1. Use of judgement in gathering and evaluating evidence– there is a room of more than one possible interpretation of requirements.
  2. Use of selective testing– Sampling procedures affect the evidence collected as audit procedures are applied only to a small population instead of checking each and every item thus affecting the level of assurance
  3. Inherit limitations of the internal controls – if internal control are weak, the auditor will do extensive substantive which may affect the level of assurance
  4. Much of the evidence available to the practitioner is more persuasive than conclusive. The is basing on what is probable and not what is exact.
  5. Possibility of collusion – The evidence may not be sufficient and appropriate enough since the management may collude with the practitioner.



September 2015 Question One A

Your audit firm has tendered for the audit of Hekima Group of Companies.


Evaluate six matters that should be considered before accepting the audit engagement in the event your firm is successful in the tender.     (6 marks)



Matter that should be considered before accepting the audit engagement in the event your firm is successful in the tender.

  1. Consider whether the audit firm has sufficient resources to service the clients needs
  2. Check to ensure that there is not conflict of interest so that auditors independence is not compromised
  3. Check to ensure that no audit staff has any blood relations with the officers of the client in the company.
  4. Consider the availability of the staff for the work ensure that you are not disqualified on any legal grounds.
  5. Consider the level of risk involved in the engagement
  6. Find out why the previous auditors were removed
  7. Consider the integrity of the management.






December 2021 Question Two B

Management audit calls for an inter-disciplinary approach considering the scope and focus of the audit.

Discuss the above statement with particular reference to:

(i) Steps involved in a management audit.       (3 marks)
(ii) Management functions appraised.      (4 marks)
(iii) Audit techniques adopted.       (3 marks)



i) Steps involved in management audit

  1. Identification of the objectives of the organization and breakdown the objective into detailed targets and plans for various segments
  2. Reviewing the organization structure to assess whether it can effectively fulfill the overall objectives and detailed targets.
  3. Examine the performance of each functional area or responsibility and should be compared with the objectives and targets

 ii) Management functions appraised

  1. Quality of management decision making
  2. Managements efficiency and effectiveness in running a viable business
  3. The integrity of management
  4. Quality of the systems implemented by the management

 iii) Audit techniques adopted

  1. Inquiry – A management auditor collects most of the evidence by asking relevant questions and obtaining answers to the questions
  2. Examination – management auditor may conduct an examination of documents and records.
  3. Confirmation – Management auditors may confirm information from third parties
  4. Observation – Management auditors may observe procedures and activities as they are executed.



December 2021 Question Three B

There is a strong inter-connection between a financial audit and an operational audit. However, differences also exist.

Discuss the above statement, clearly bringing out any differences between the two types of audit.        (4 marks)



Difference between a financial audit and operational audit

Financial audit – Focuses on determining whether the entity’s financial information is presented in accordance with the identified financial reporting framework. The objectives are achieved by obtaining sufficient and appropriate audit evidence to enable the auditor information is free from material misstatement due to fraud and error.

Operational audit – these are future oriented examinations that involve a systematic review of organizations key operations to access performance, identify opportunities for improvement and develop recommendations for further action.



September 2021 Question Three C

Most auditing practitioners agree that legal liability is part of the risk associated with their work. However, they argue that practising auditors may also take specific action to minimise their liability.



Evaluate the measures that auditors may take to minimise the possibilities of legal liability.    (8 marks)


Measures that auditors may take to minimize the possibilities of legal liability

  1. Proper client screening before acceptance of an appointment
  2. Following the auditing standards in audit of financial statements.
  3. Stating in the report the work carried out, work not done and any limitations to the work
  4. Stating the purpose of the report in the report and stating that it may not be used for other purpose.
  5. Identifying the authorized recipients of the report in the report
  6. Attaching other appropriate disclosures in the reports
  7. Continuous training the audit staff.
  8. Implementing quality control procedures in the audit




Complete copy of CPA ADVANCED AUDITING AND ASSURANCE Revision Kit is available in SOFT copy (Reading using our MASOMO MSINGI PUBLISHERS APP) and in HARD copy 

Phone: 0728 776 317


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