- 20 Marks
AA – Mar 2025 – L2 – Q5 – Auditor Expertise
Identify factors for using an expert in a mining audit.
Question
a).i) Kwade and Lobi Associates, an audit firm based in Tamale, has been engaged by Mawuena Mines LTD, a licensed medium mining company, to audit their financial statements for the year ending 2023. This engagement marks a significant milestone for the audit firm, as it is their most substantial client to date, with audit fees constituting nearly 40% of the firm’s annual service revenue.
Auditing a mining company necessitates specialised skills, knowledge and experience in the mining industry to form an audit opinion. To address these requirements, the audit firm has engaged Miss Ewoenam Agbesi, the firstborn of the Engagement Partner, who holds an MSc in Mining Engineering from the University of Mines & Technology. Although she has just graduated, her expertise in mining is considered crucial for this audit.
Given the complexity and significance of the audit, the engagement also necessitates the involvement of other auditors to provide their opinions on specific aspects of the financial statements.
Required:
Identify and explain THREE factors Kwade and Lobi Associates should consider when determining whether to use the work of Miss Ewoenam Agbesi as an expert in mining.
ii) What specific aspects of the financial statements might necessitate the involvement of other auditors? Provide examples related to the mining industry.
b) The Auditor General of Ghana has a critical role in ensuring financial accountability and transparency in the country. He has a mandate which includes several key responsibilities.
Required:
Enumerate FIVE mandates of the Auditor General as enshrined in the 1992 Constitution of the Republic of Ghana.
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