Commercial-and-administrative-law-–-November-2017 Knec Past Paper

DIPLOMA IN ACCOUNTANCY

1. (a) Elgo Associates have been appointed to audit the accounts of Longo Limited. Explain six steps that the firm should consider before accepting the appointment.
(12 marks)
(b) Highlight four differences between a statutory audit and a private audit. (8 marks)
2. (a) Explain six ways in which an audit firm may overcome the threats of independence.
(12 marks)
(b) Prepare an internal control questionnaire that would assure the auditor that control objectives over fixed assets have been achieved. (8 marks)
3. (a) Explain six circumstances under which an auditor may seek evidence from third
parties. (12 marks)
(b) Prepare an audit programme for bank reconciliation. (8 marks)
4. (a) Explain five ways in which an external auditor may benefit from relying on the work of the internal auditor. (10 marks)
(b) Explain five advantages of using computer assisted audit techniques (CAATs) during auditing. (10 marks)
5. (a) Outline the elements of an unqualified audit report. (12 marks)
(b) Explain four factors that might influence the analytical review procedures conducted an auditor.
(8 marks)
6. (a) Highlight six advantages of statistical sampling. (12 marks)
(b) Stock and work-in-progress forms a significant proportion of the current assets. Enumerate the audit procedures that an auditor should carry out before the stock take.
(8 marks)

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