Question Tag: Audit Procedures

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TAI – Feb 2020 – L1 – Q5 – Tax Audit Engagements and Investigations

Outline audit evidence, substantive tests, and tax implications for payroll audit of Eastwood Engineering Limited.

Question

You have been assigned by the audit manager of your firm to conduct a payroll audit of Eastwood Engineering Limited, a plastic manufacturing company with a turnover of GH¢25 million. The head office sited in Abokobi includes the manufacturing unit, the accounting department and the main administration. There are a number of sales officers in different parts of the country.

The wages records are computerized, and all the wages information are processed at the head office. Some of the employees in the manufacturing unit are paid cash and all the other employees are paid directly into their bank accounts. Manufacturing employees are paid their wages a week in arrears. All other employees are paid at the end of the week.

There is also a personnel department, which is independent of the wages department. The personnel department maintains the records of the employees including the starting date, grade, current salary and date of separation.

Previous tax audit reports by Ghana Revenue Authority in accordance with Section 36 of Revenue Administration Act, 2016 (Act 915) have revealed that:
i) The company failed to deduct appropriate taxes on wages and salaries of staff especially the casual employees.
ii) Paying fictitious employees and failing to account for the payment on the payroll.
iii) Paying employees after they have left.

Due to these abnormalities detected in the earlier audits by the Ghana Revenue Authority, the audit manager has asked you do consider audit procedures you would carry out to obtain sufficient appropriate evidence of the existence of employees and to ensure that appropriate taxes have been deducted and paid to the Commissioner General of Ghana Revenue Authority.

You are required to prepare a briefing paper which should guide the audit team you are required to lead in the field in the form of a memorandum for the consideration of your audit manager outlining:
i) The audit evidence you would obtain to verify the existence of employees whose wages are paid both in cash and directly into their bank accounts.

ii) The substantive test you would carry out to verify that appropriate taxes are deducted and paid to the Commissioner General of Ghana Revenue Authority.

iii) The tax implications both now and in the future of the company’s infractions as indicated in the tax audit report.

Answer

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Tags: Audit evidence, Audit Procedures, Employee Verification, Ghana Revenue Authority, PAYE, Payroll Audit, Substantive Testing, Tax Compliance, Tax implications, Tax Penalties
Level: Level 1

Topic: Audit Practices and Procedures, Audit Review and Reporting, Tax Audit Engagements and Investigations
Series: FEB 2020

TAI – Feb 2020 – L1 – Q3 – Audit Evidence Sources

List and explain five significant sources of audit evidence and the nature of evidence expected from each.

Question

a) The auditor should obtain sufficient and appropriate audit evidence in order to be able to form an audit opinion.

Required: a) Enumerate five (5) significant sources of audit evidence and for each source explain briefly the nature of evidence expected.

b) What is sufficient audit evidence depends upon auditor’s judgment. Explain three matters which influence such judgment.

c) Identify and explain three situations which restrict the auditor’s ability to obtain sufficient appropriate audit evidence. Give two examples for each situation.

Answer

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Tags: Audit evidence, Audit Procedures, Evidence Collection, Sources, Tax Audit
Level: Level 1

Topic: Audit Procedures, Audit Review and Reporting
Series: FEB 2020

TAI – Feb 2020 – Q2- Audit Planning

Outline a plan for a tax audit of Timpani Ltd for 2015-2018, to be completed within 30 days.

Question

(A) You have been asked to lead a team of tax auditors to audit Timpani Ltd covering the period January 2015 to December 2018. The company has its financial year end 31st December each year. The agreed date for the commencement of the audit is 3rd January 2020. You have been told that in view of the urgency required of the work, the audit report should be produced not later than 30 days after the date of commencement of the audit for the report to be sent to Commissioner-General.

Required:
As the audit supervisor, draw up an outline plan of how the audit assignment will be arranged. This will form the basis of your detailed audit work to be carried out. (B)

In the course of auditing the Tax Returns and records of Timpani Limited, the following observations have been made by the team and your audit manager has invited you to discuss its tax implication from both the Value Added Tax (VAT) and Direct tax point of view.

The company has multiple ‘strategic business units (SBU) located throughout the country and other West Africa countries. As part of your review of the records of (SBUs)’ you noticed the following:
i. Same components of material are purchased by different units at different prices.
ii. Marketing personnel have been offering discount/price reductions on catalogue/quoted prices beyond the authorized quantum/range, some of which were ratified subsequently.
iii. The company has written off all debts which have been outstanding for more than three years in its books. The total amount was GH¢680,000 and has also made provision for 5% on the outstanding debt of GH¢3.5 million.
iv. The company normally sends goods on sale or return basis. At the end of the year 2019, goods valued at GH¢10 millions were still in the custody of the agent and another goods worth GH¢1.5million had been returned by customers for defects. It is the policy of the company to issue VAT invoice to accompany all goods sent out to both customers and agents.

Required:
Draft a report to your audit manager covering the above observations and discuss the tax implications of these observations vis-a-vis the returns submitted by the taxpayer. Make assumptions, if necessary.

Answer

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Tags: Audit Planning, Audit Procedures, Audit Schedule, Tax Audit, Taxpayer Compliance
Level: Level 1

Topic: Audit Review and Reporting, Revenue Inquiry and Financial Analysis, Tax Audit Engagements and Investigations
Series: AUGUST 2020

TAI – Aug 2020 – L1 – Q4 – Audit Review and Reporting

Recommend examination procedures for reviewing God’s Time Ltd.’s profit forecast for COVID-19 financial assistance.

Question

In order to assist businesses during the COVID-19 period, the Government of Ghana has announced various packages including financial assistance to various companies and other Small and Medium Enterprises. Your firm, Prosper & Co has been approached to perform an assurance engagement for God’s Time Ltd; the engagement will be a review of prospective financial information which is needed to support the company’s application for financial assistance provided under COVID-19 facilities. God’s Time Ltd had its financial year ended 31st December each year.

The operating profit forecast for the two years to 31st December 2020 prepared by a member of the accounting team of God’s Time Ltd is shown below, along with some accompanying notes.

	Six months to 30th June 2019	Six months to 31st Dec. 2019	Six months to 30 June. 2020	Six months to 31st Dec. 2020
	GH¢	GH¢	GH¢	GH¢
Earnings	2,801,597	3,088,680	4,210,265	4,429,728
Direct costs	2,135,938	2,315,746	3,413,711	3,618,584
Gross Profit	665,659	772,934	796,554	811,144
Operating Exp.
Wages & Salaries	168,452	184,864	209,546	218,762
Advertising	13,840	20,542	28,548	31,540
Design costs	21,580	32,456	50,452	43,546
Marketing	10,896	12,458	16,520	34,450
Interest on Loan	45,543	48,620	51,654	60,542
Other Operating Exp	266,264	309,173	318,622	324,458
Net Profit	139,084	164,821	121,212	97,846

Additional Notes: i. God’s Time Ltd is a producer of greetings cards and giftware; the demand for which is seasonal in nature.

ii. Design costs are mostly payroll costs of the staff working in the company’s design team, and the costs relate to the design and development of new product ranges.

iii. The total ‘Other expenses’ is calculated based on 40% of the projected revenue for the six-month period.

iv. In 2019, the company was granted a loan facility to complete the ongoing factory project.

Required:

Recommend the examination procedures which should be used in the review of the profit forecast. (B)

You are the supervisor in-charge of the audit of Titi bidi Construction Company Limited. The audit of the company is near completion, and you are finalizing the audit report. As part of your final review, you want a confirmation that, the tax liability as reported is accurate and as such there is no liability that has not been captured.

Required:

Outline the audit steps to verify that, all tax payments and tax credits has been captured and the liability as reported is accurate.

Answer

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Tags: Assurance Engagement, Audit Procedures, COVID-19 Assistance, Financial Analysis, Ghana Revenue Authority, Profit Forecast
Level: Level 1

Topic: Audit Review and Reporting, Revenue Inquiry and Financial Analysis
Series: AUGUST 2020

AAA – Mar 2025 – L3 – Q3 – Audit of Complex Transactions and Provisions

Justify provisions for toxic emission fines, outline audit procedures for a new filter and provision, and identify risks in providing assurance for a disposal licence.

Question

You are partner for a firm called Konamoah & Associates, who are auditors for Aluco, an aluminium processing company. Aluco has several issues with its aluminium and steel byproducts, including toxic emissions and a poor health and safety record for employees in the workshop. Aluco has proven to be very lucrative for your firm and you are busy planning the coming year’s audit visits after agreeing to continue this engagement some weeks earlier. The by-products arising from the production process include the following:

Sharp metallic fragments that require disposal under an annually granted licence.
Toxic exhaust gases that require treatment by a specific filter.
Carcinogenic oil that require storage in underground bunkers. Aluco is in the process of installing a new filter to process toxic exhaust gases. This represents an investment of GH¢2,000,000 and is material to the financial statements. The new filter is expected to reduce the number of toxic leaks that the company has caused by over 90%, although the suppliers of the filter, Adamah Enterprises, have only just rushed this product onto the market. In the last five years, Aluco has been fined material amounts of between GH¢200,000 and GH¢400,000 by the Tema Metropolitan Assembly, so this new filter is expected to reduce their liability substantially. During an initial planning meeting held at Aluco, the Finance Director Frank Afful suggested to you that the year’s provision for toxic emission fines be removed as the new filter is likely to reduce these to negligible amounts. He has also mentioned that Aluco will need to start supplying information to assist with the metallic fragment disposal licence application and asked if your firm would be interested in providing assurance on the information required. Required: a) As the Audit Partner, justify the need for any provisions in respect of toxic emission fines. (4 marks) b) What audit procedures are you required to perform to determine the most appropriate treatment of both the new filter and the provision in the financial statements of Aluco and any possible worst case impact on your audit report? (10 marks) c) Identify SIX risks that your firm might have by agreeing to provide required assurance for Aluco’s application for a disposal licence. (6 marks)

Answer

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Tags: Assurance engagements, Audit opinion, Audit Procedures, Environmental Compliance, Financial Statements, IAS 37, Independence, Provisions, Risk Assessment, Toxic Emissions
Level: Level 3

Topic: Audit of Complex Entities
Series: MAR 2025

AAA – Mar 2025 – L3 – Q2 – Audit of Complex Transactions

Analyze financial statement extracts for audit risks in property, plant & equipment, trade receivables, and inventory, and outline audit evidence needed.

Question

Fadila Associates has been the auditors of Aduaba LTD for the past 3 years. Aduaba LTD is into the production of cashew drinks. You have been assigned to lead the audit of Aduaba LTD and have been provided with the following extracts from the draft financial statements for 2023 before the final audit planning meeting with the Chief Accountant.

Draft statement of financial position (extracts)

	Draft 2023		Actual 2022
	GHc’000	GHc’000	GHc’000	GHc’000
Property, Plant and Equipment	42,860		41,620
Receivables
Trade	4,800		3,150
Other	380	5,180	280	3,430
Inventory
Raw materials	2,460		1,870
Work-in-progress	380		450
Finished goods	2,270	5,110	2,030	4,350
Total Assets		53,150		49,400
Current liabilities
Trade	4,116		3,470
Other	870	4,986	650	4,120

Draft income statement (extracts)

	Draft 2023	Actual 2022
	GHc’000	GHc’000
Revenue	53,250	50,750
Cost of sales	39,360	39,220
Gross profit	13,890	11,530
Depreciation of Property, Plant and Equipment	4,450	2,810
Other expenses	3,540	3,480
Profit before tax	5,900	5,240

Your Audit Manager has reviewed these extracts and has identified three financial statement headings which he believes require further investigation. These are property, plant & equipment, trade receivables and inventory. He has also calculated the following accounting ratios:

	Draft 2023	Actual 2022
Trade receivables collection period	28 days	17 days
Inventory turnover	7.6 times	8.9 times
Gross profit percentage	26%	23%

Required: a) Explain why the Audit Manager has selected these three headings for further investigation from the given financial statement extract. (9 marks) b) Outline the audit evidence the Audit Manager should request for to clarify the situation regarding these financial statement headings. (11 marks)

Answer

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Tags: Audit Procedures, Financial Statements, Inventory, Property Plant Equipment, Risk Assessment, Trade receivables
Level: Level 3

Topic: Audit of Complex Transactions
Series: MAR 2025

AAA – Nov 2024 – L3 – Q5b – Anti-Money Laundering Regulations and Auditor Responsibilities

Discuss anti-money laundering regulations in Ghana and auditors' responsibilities in compliance.

Question

Lamsey Jewelers is a family-owned business specializing in high-end jewellery, located in Dunkwa-On-Offin in the Central Region of Ghana. The company sources gold from various suppliers in the small-scale mining sector. Recently, the Minerals Commission received anonymous tips suggesting that Lamsey Jewelers may be involved in laundering money through its operations. Authorities suspect that the business could be used to conceal the origins of illicit funds through gold purchases and sales.

To investigate these suspicions, regulatory authorities have appointed Baba Yara and Associates, an independent auditing firm, to conduct a thorough review of Lamsey Jewelers’ operations and financial transactions. During the audit, Baba Yara and Associates discovered that Lamsey Jewelers has been accepting large cash payments for custom jewellery orders without conducting proper due diligence on the customers. Several transactions involving cash payments exceed typical retail amounts, raising suspicions of potential money laundering.

Required:

i) Discuss the key legal and regulatory requirements in Ghana related to anti-money laundering relevant to Lamsey Jewelers.

ii) Discuss the obligations placed on professional firms such as Baba Yara and Associates in relation to money laundering.

Answer

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Tags: Anti-Money Laundering, Audit Procedures, Compliance, Due diligence, Financial Crimes, Professional Ethics, Regulatory Framework, Risk Assessment
Level: Level 3

Topic: Regulatory Framework and Audit Responsibilities
Series: Nov 2024

AA – Nov 2024 – L2 – Q5b – Substantive Testing of Accounts Receivable

Explain three substantive tests for verifying accounts receivable balance.

Question

Baaba & Associates, an audit firm, is conducting a year-end audit of Rashida LTD. The audit team is particularly concerned about the accuracy of the accounts receivable balance reported on the statement of financial position as of December 31, 2023. Therefore, as part of their audit procedures, they need to perform substantive tests to identify any material misstatements, errors, or fraud that could impact the accuracy of the financial statements.

Required:
Explain THREE substantive tests that the audit team at Baaba & Associates should perform to obtain sufficient appropriate audit evidence regarding the accuracy of Rashida LTD’s accounts receivable balance.

Answer

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Tags: Accounts Receivable, Audit evidence, Audit Procedures, Financial Reporting, Risk Assessment, Substantive Testing
Level: Level 2

Topic: Audit and Assurance Evidence
Series: Nov 2024

AA – Nov 2024 – L2 – Q5a – Tests of Control and Methods for Testing Controls

Explain two tests of control and their corresponding methods of testing.

Question

Oboshie Audit Firm has been engaged to audit the financial statements of Abakah Manufacturing LTD for the year ended December 31, 2023. During the planning phase of the audit, the audit team identified that Abakah Manufacturing LTD relies heavily on its internal control system to ensure the accuracy and completeness of its financial reporting.

Required:
i) Explain TWO tests of control to be performed by Oboshie Audit Firm to evaluate the effectiveness of Abakah Manufacturing LTD’s internal controls over its financial reporting.

ii) Identify a method that should be used under each test of control in (i) above.

Answer

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Tags: Approval of Transactions, Audit Procedures, Control Testing, Internal Controls, Risk Assessment, Segregation of Duties
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements
Series: Nov 2024

AAA – May 2016 – L3 – Q6 – Audit Reporting

Discuss audit work and written representation letter for legal claims, outstanding balances, and investments.

Question

Bob Removals Limited is a removals company. In the year ended December 31, 2015, the company made a trading profit of N800,000. You are the manager in charge of the audit.
The following issues have arisen:

(i) A customer is suing the company for N1 million for damage caused to antique furniture. The company is defending the claim and believes that the furniture was a reproduction as opposed to antique and therefore worth only N100,000.
(ii) A balance due from Safe Storage in respect of sub-contract work, of N300,000, has been outstanding for over six months. Your firm has been asked by Bob Removals’ accountant not to write to Safe Storage for direct confirmation of this amount as the latter company objects to such letters. You have been assured by the accountant that the relationship between the two companies is good and that the outstanding balance will be paid.
(iii) Bob Removals has recently invested in four new removal vans and is currently carrying out extensive refurbishment of its premises. As a result of this expenditure, the company has reached its overdraft limit of N500,000.

Required:

For each of the above issues:
a. State, with reasons, the audit work that you would expect to find when undertaking your review of the audit working papers for the year ended December 31, 2015.
b. Draft the relevant sections dealing with these issues of the written representation letter you would wish the directors to sign.

Answer

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Tags: Audit Procedures, Investment, Legal Claim, Outstanding Balance, Written Representation
Level: Level 3

Topic: Audit Reporting

TAI – Feb 2020 – L1 – Q5 – Tax Audit Engagements and Investigations

Outline audit evidence, substantive tests, and tax implications for payroll audit of Eastwood Engineering Limited.

Question

ii) The substantive test you would carry out to verify that appropriate taxes are deducted and paid to the Commissioner General of Ghana Revenue Authority.

iii) The tax implications both now and in the future of the company’s infractions as indicated in the tax audit report.

Answer

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Tags: Audit evidence, Audit Procedures, Employee Verification, Ghana Revenue Authority, PAYE, Payroll Audit, Substantive Testing, Tax Compliance, Tax implications, Tax Penalties
Level: Level 1

Topic: Audit Practices and Procedures, Audit Review and Reporting, Tax Audit Engagements and Investigations
Series: FEB 2020

TAI – Feb 2020 – L1 – Q3 – Audit Evidence Sources

List and explain five significant sources of audit evidence and the nature of evidence expected from each.

Question

a) The auditor should obtain sufficient and appropriate audit evidence in order to be able to form an audit opinion.

Required: a) Enumerate five (5) significant sources of audit evidence and for each source explain briefly the nature of evidence expected.

b) What is sufficient audit evidence depends upon auditor’s judgment. Explain three matters which influence such judgment.

c) Identify and explain three situations which restrict the auditor’s ability to obtain sufficient appropriate audit evidence. Give two examples for each situation.

Answer

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Tags: Audit evidence, Audit Procedures, Evidence Collection, Sources, Tax Audit
Level: Level 1

Topic: Audit Procedures, Audit Review and Reporting
Series: FEB 2020

TAI – Feb 2020 – Q2- Audit Planning

Outline a plan for a tax audit of Timpani Ltd for 2015-2018, to be completed within 30 days.

Question

Required:
As the audit supervisor, draw up an outline plan of how the audit assignment will be arranged. This will form the basis of your detailed audit work to be carried out. (B)

Answer

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Tags: Audit Planning, Audit Procedures, Audit Schedule, Tax Audit, Taxpayer Compliance
Level: Level 1

Topic: Audit Review and Reporting, Revenue Inquiry and Financial Analysis, Tax Audit Engagements and Investigations
Series: AUGUST 2020

TAI – Aug 2020 – L1 – Q4 – Audit Review and Reporting

Recommend examination procedures for reviewing God’s Time Ltd.’s profit forecast for COVID-19 financial assistance.

Question

The operating profit forecast for the two years to 31st December 2020 prepared by a member of the accounting team of God’s Time Ltd is shown below, along with some accompanying notes.

	Six months to 30th June 2019	Six months to 31st Dec. 2019	Six months to 30 June. 2020	Six months to 31st Dec. 2020
	GH¢	GH¢	GH¢	GH¢
Earnings	2,801,597	3,088,680	4,210,265	4,429,728
Direct costs	2,135,938	2,315,746	3,413,711	3,618,584
Gross Profit	665,659	772,934	796,554	811,144
Operating Exp.
Wages & Salaries	168,452	184,864	209,546	218,762
Advertising	13,840	20,542	28,548	31,540
Design costs	21,580	32,456	50,452	43,546
Marketing	10,896	12,458	16,520	34,450
Interest on Loan	45,543	48,620	51,654	60,542
Other Operating Exp	266,264	309,173	318,622	324,458
Net Profit	139,084	164,821	121,212	97,846

Additional Notes: i. God’s Time Ltd is a producer of greetings cards and giftware; the demand for which is seasonal in nature.

ii. Design costs are mostly payroll costs of the staff working in the company’s design team, and the costs relate to the design and development of new product ranges.

iii. The total ‘Other expenses’ is calculated based on 40% of the projected revenue for the six-month period.

iv. In 2019, the company was granted a loan facility to complete the ongoing factory project.

Required:

Recommend the examination procedures which should be used in the review of the profit forecast. (B)

Required:

Outline the audit steps to verify that, all tax payments and tax credits has been captured and the liability as reported is accurate.

Answer

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Tags: Assurance Engagement, Audit Procedures, COVID-19 Assistance, Financial Analysis, Ghana Revenue Authority, Profit Forecast
Level: Level 1

Topic: Audit Review and Reporting, Revenue Inquiry and Financial Analysis
Series: AUGUST 2020

AAA – Mar 2025 – L3 – Q3 – Audit of Complex Transactions and Provisions

Justify provisions for toxic emission fines, outline audit procedures for a new filter and provision, and identify risks in providing assurance for a disposal licence.

Question

Sharp metallic fragments that require disposal under an annually granted licence.
Toxic exhaust gases that require treatment by a specific filter.
Carcinogenic oil that require storage in underground bunkers. Aluco is in the process of installing a new filter to process toxic exhaust gases. This represents an investment of GH¢2,000,000 and is material to the financial statements. The new filter is expected to reduce the number of toxic leaks that the company has caused by over 90%, although the suppliers of the filter, Adamah Enterprises, have only just rushed this product onto the market. In the last five years, Aluco has been fined material amounts of between GH¢200,000 and GH¢400,000 by the Tema Metropolitan Assembly, so this new filter is expected to reduce their liability substantially. During an initial planning meeting held at Aluco, the Finance Director Frank Afful suggested to you that the year’s provision for toxic emission fines be removed as the new filter is likely to reduce these to negligible amounts. He has also mentioned that Aluco will need to start supplying information to assist with the metallic fragment disposal licence application and asked if your firm would be interested in providing assurance on the information required. Required: a) As the Audit Partner, justify the need for any provisions in respect of toxic emission fines. (4 marks) b) What audit procedures are you required to perform to determine the most appropriate treatment of both the new filter and the provision in the financial statements of Aluco and any possible worst case impact on your audit report? (10 marks) c) Identify SIX risks that your firm might have by agreeing to provide required assurance for Aluco’s application for a disposal licence. (6 marks)

Answer

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Tags: Assurance engagements, Audit opinion, Audit Procedures, Environmental Compliance, Financial Statements, IAS 37, Independence, Provisions, Risk Assessment, Toxic Emissions
Level: Level 3

Topic: Audit of Complex Entities
Series: MAR 2025

AAA – Mar 2025 – L3 – Q2 – Audit of Complex Transactions

Analyze financial statement extracts for audit risks in property, plant & equipment, trade receivables, and inventory, and outline audit evidence needed.

Question

Draft statement of financial position (extracts)

	Draft 2023		Actual 2022
	GHc’000	GHc’000	GHc’000	GHc’000
Property, Plant and Equipment	42,860		41,620
Receivables
Trade	4,800		3,150
Other	380	5,180	280	3,430
Inventory
Raw materials	2,460		1,870
Work-in-progress	380		450
Finished goods	2,270	5,110	2,030	4,350
Total Assets		53,150		49,400
Current liabilities
Trade	4,116		3,470
Other	870	4,986	650	4,120

Draft income statement (extracts)

	Draft 2023	Actual 2022
	GHc’000	GHc’000
Revenue	53,250	50,750
Cost of sales	39,360	39,220
Gross profit	13,890	11,530
Depreciation of Property, Plant and Equipment	4,450	2,810
Other expenses	3,540	3,480
Profit before tax	5,900	5,240

	Draft 2023	Actual 2022
Trade receivables collection period	28 days	17 days
Inventory turnover	7.6 times	8.9 times
Gross profit percentage	26%	23%

Answer

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Tags: Audit Procedures, Financial Statements, Inventory, Property Plant Equipment, Risk Assessment, Trade receivables
Level: Level 3

Topic: Audit of Complex Transactions
Series: MAR 2025

AAA – Nov 2024 – L3 – Q5b – Anti-Money Laundering Regulations and Auditor Responsibilities

Discuss anti-money laundering regulations in Ghana and auditors' responsibilities in compliance.

Question

Required:

i) Discuss the key legal and regulatory requirements in Ghana related to anti-money laundering relevant to Lamsey Jewelers.

ii) Discuss the obligations placed on professional firms such as Baba Yara and Associates in relation to money laundering.

Answer

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Tags: Anti-Money Laundering, Audit Procedures, Compliance, Due diligence, Financial Crimes, Professional Ethics, Regulatory Framework, Risk Assessment
Level: Level 3

Topic: Regulatory Framework and Audit Responsibilities
Series: Nov 2024

AA – Nov 2024 – L2 – Q5b – Substantive Testing of Accounts Receivable

Explain three substantive tests for verifying accounts receivable balance.

Question

Answer

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Tags: Accounts Receivable, Audit evidence, Audit Procedures, Financial Reporting, Risk Assessment, Substantive Testing
Level: Level 2

Topic: Audit and Assurance Evidence
Series: Nov 2024

AA – Nov 2024 – L2 – Q5a – Tests of Control and Methods for Testing Controls

Explain two tests of control and their corresponding methods of testing.

Question

Required:
i) Explain TWO tests of control to be performed by Oboshie Audit Firm to evaluate the effectiveness of Abakah Manufacturing LTD’s internal controls over its financial reporting.

ii) Identify a method that should be used under each test of control in (i) above.

Answer

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Tags: Approval of Transactions, Audit Procedures, Control Testing, Internal Controls, Risk Assessment, Segregation of Duties
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements
Series: Nov 2024

AAA – May 2016 – L3 – Q6 – Audit Reporting

Discuss audit work and written representation letter for legal claims, outstanding balances, and investments.

Question

Required:

Answer

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Tags: Audit Procedures, Investment, Legal Claim, Outstanding Balance, Written Representation
Level: Level 3

Topic: Audit Reporting

Question Tag: Audit Procedures

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TAI – Feb 2020 – L1 – Q5 – Tax Audit Engagements and Investigations

Outline audit evidence, substantive tests, and tax implications for payroll audit of Eastwood Engineering Limited.

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TAI – Feb 2020 – L1 – Q3 – Audit Evidence Sources

List and explain five significant sources of audit evidence and the nature of evidence expected from each.

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TAI – Feb 2020 – Q2- Audit Planning

Outline a plan for a tax audit of Timpani Ltd for 2015-2018, to be completed within 30 days.

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TAI – Aug 2020 – L1 – Q4 – Audit Review and Reporting

Recommend examination procedures for reviewing God’s Time Ltd.’s profit forecast for COVID-19 financial assistance.

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AAA – Mar 2025 – L3 – Q3 – Audit of Complex Transactions and Provisions

Justify provisions for toxic emission fines, outline audit procedures for a new filter and provision, and identify risks in providing assurance for a disposal licence.

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AAA – Mar 2025 – L3 – Q2 – Audit of Complex Transactions

Analyze financial statement extracts for audit risks in property, plant & equipment, trade receivables, and inventory, and outline audit evidence needed.

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AAA – Nov 2024 – L3 – Q5b – Anti-Money Laundering Regulations and Auditor Responsibilities

Discuss anti-money laundering regulations in Ghana and auditors' responsibilities in compliance.

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AA – Nov 2024 – L2 – Q5b – Substantive Testing of Accounts Receivable

Explain three substantive tests for verifying accounts receivable balance.

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AA – Nov 2024 – L2 – Q5a – Tests of Control and Methods for Testing Controls

Explain two tests of control and their corresponding methods of testing.

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AAA – May 2016 – L3 – Q6 – Audit Reporting

Discuss audit work and written representation letter for legal claims, outstanding balances, and investments.

Required:

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TAI – Feb 2020 – L1 – Q5 – Tax Audit Engagements and Investigations

Outline audit evidence, substantive tests, and tax implications for payroll audit of Eastwood Engineering Limited.

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TAI – Feb 2020 – L1 – Q3 – Audit Evidence Sources

List and explain five significant sources of audit evidence and the nature of evidence expected from each.

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TAI – Feb 2020 – Q2- Audit Planning

Outline a plan for a tax audit of Timpani Ltd for 2015-2018, to be completed within 30 days.

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TAI – Aug 2020 – L1 – Q4 – Audit Review and Reporting

Recommend examination procedures for reviewing God’s Time Ltd.’s profit forecast for COVID-19 financial assistance.

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AAA – Mar 2025 – L3 – Q3 – Audit of Complex Transactions and Provisions

Justify provisions for toxic emission fines, outline audit procedures for a new filter and provision, and identify risks in providing assurance for a disposal licence.

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AAA – Mar 2025 – L3 – Q2 – Audit of Complex Transactions

Analyze financial statement extracts for audit risks in property, plant & equipment, trade receivables, and inventory, and outline audit evidence needed.

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AAA – Nov 2024 – L3 – Q5b – Anti-Money Laundering Regulations and Auditor Responsibilities

Discuss anti-money laundering regulations in Ghana and auditors' responsibilities in compliance.

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AA – Nov 2024 – L2 – Q5b – Substantive Testing of Accounts Receivable

Explain three substantive tests for verifying accounts receivable balance.

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AA – Nov 2024 – L2 – Q5a – Tests of Control and Methods for Testing Controls

Explain two tests of control and their corresponding methods of testing.

You're reporting an error for "AA – Nov 2024 – L2 – Q5a – Tests of Control and Methods for Testing Controls"

AAA – May 2016 – L3 – Q6 – Audit Reporting

Discuss audit work and written representation letter for legal claims, outstanding balances, and investments.

Required:

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