Question Tag: Misappropriation

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AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

Question

The Financial Controller (FC) of Poki Limited made an observation on the draft engagement letter sent by the external auditors to the company, an extract of which is as stated below:

“The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error, and non-compliance with laws or regulations rests with the company’s directors. In accordance with auditing standards, we shall endeavor to plan our audit so that we have a reasonable expectation of detecting material misstatements in the financial statements or accounting records (including any material misstatements resulting from fraud, error, or non-compliance with laws or regulations). However, because any internal control structure, no matter how effective, cannot eliminate the possibility that errors or irregularities may occur and remain undetected and because we use selective testing in our audit, we cannot guarantee that errors or irregularities, if present, will be detected. Accordingly, our audit should not be relied upon to disclose all such material misstatements or frauds, errors, or instances of non-compliance as may exist. The best safeguard against irregularities and fraud is a sound system of internal control.”

The FC accused the auditors of running away from their responsibilities of exposing to the owners of the company fraudulent financial reporting and misappropriation of assets. To him, what is the purpose of audit when fraud and errors could not be discovered? He has threatened to discuss with the Board of Directors and insists that the engagement letter will not be signed until those sections are removed. You are a senior member of the audit team.

Required:

a. Outline the objectives of auditors in relation to fraud. (6 Marks)

b. Explain fraudulent financial reporting and misappropriation of assets. (7 Marks)

c. State the procedures auditors should perform to identify the risks of material misstatement due to fraud. (7 Marks)

Answer

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Tags: Audit Responsibilities, Corporate Governance, Engagement letter, Fraud Detection, Misappropriation, Risk Identification
Level: Level 3

Topic: Audit of Complex Entities
Series: NOV 2022

PSAF – Nov 2016 – L2 – Q4a – Government Expenditure

This question identifies various sources of loss of public funds in the public sector, focusing on misappropriation and fraud.

Question

Loss or shortage of public funds is depletion in government funds at a given time.

Enumerate SIX sources through which loss of funds may arise in the public sector.

Answer

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Tags: Financial management, Fraud, Losses in Public Sector, Misappropriation, Public Funds
Level: Level 2

Topic: Government Expenditure
Series: NOV 2016

BL – May 2017 – L1 – SB – Q3c – Law of Tort

Assesses the criminal implications of Adikolu’s actions in collecting rent without authorization and selling house fixtures.

Question

Adikolu, a tax consultant and real property dealer, took possession of a house at 2, Wharf Road, Kokoko in Delta State so as to collect the rent due from tenancy of the house on behalf of Boss who lives in the United States. Adikolu collected rents on the house for two years in advance to the tune of N50 million without informing Boss. On learning that Boss would be visiting Nigeria after five years, he removed from the house and sold fifty air-conditioning units and thereafter set the property on fire.

Required:

In criminal law, explain the implication of Adikolu’s conduct in:

i Collection of the rent without informing Boss (3 Marks)

ii Removing and selling the air-conditioning units (3 Marks)

Answer

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Tags: Criminal Law, Misappropriation, Property Damage, Rent Collection, Sale of Property
Level: Level 1

Topic: Law of Tort
Series: MAY 2017

BL – May 2024 – L1 – SB – Q4c – Law of Trusts

This question tests candidates on the concept of conversion, particularly fraudulent intent with respect to money and misappropriation in criminal law.

Question

c. For the conversion of a movable thing to amount to stealing, the prosecution must prove a fraudulent intent.

i. Explain what the intent states concerning money.

(4 Marks)
ii. James promised to send some people to Canada on scholarship. He collected money from them for the purpose. He did not send them and did not refund the money on demand or within a reasonable time. Explain the liability of James, if any. (4 Marks)

(Total 8 Marks)

Answer

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Tags: Conversion, Criminal Law, Fraudulent Intent, Misappropriation, Stealing
Level: Level 1

Topic: Law of Trusts
Series: MAY 2024

AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

Question

The Financial Controller (FC) of Poki Limited made an observation on the draft engagement letter sent by the external auditors to the company, an extract of which is as stated below:

Required:

a. Outline the objectives of auditors in relation to fraud. (6 Marks)

b. Explain fraudulent financial reporting and misappropriation of assets. (7 Marks)

c. State the procedures auditors should perform to identify the risks of material misstatement due to fraud. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Responsibilities, Corporate Governance, Engagement letter, Fraud Detection, Misappropriation, Risk Identification
Level: Level 3

Topic: Audit of Complex Entities
Series: NOV 2022

PSAF – Nov 2016 – L2 – Q4a – Government Expenditure

This question identifies various sources of loss of public funds in the public sector, focusing on misappropriation and fraud.

Question

Loss or shortage of public funds is depletion in government funds at a given time.

Enumerate SIX sources through which loss of funds may arise in the public sector.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial management, Fraud, Losses in Public Sector, Misappropriation, Public Funds
Level: Level 2

Topic: Government Expenditure
Series: NOV 2016

BL – May 2017 – L1 – SB – Q3c – Law of Tort

Assesses the criminal implications of Adikolu’s actions in collecting rent without authorization and selling house fixtures.

Question

Required:

In criminal law, explain the implication of Adikolu’s conduct in:

i Collection of the rent without informing Boss (3 Marks)

ii Removing and selling the air-conditioning units (3 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Criminal Law, Misappropriation, Property Damage, Rent Collection, Sale of Property
Level: Level 1

Topic: Law of Tort
Series: MAY 2017

BL – May 2024 – L1 – SB – Q4c – Law of Trusts

This question tests candidates on the concept of conversion, particularly fraudulent intent with respect to money and misappropriation in criminal law.

Question

c. For the conversion of a movable thing to amount to stealing, the prosecution must prove a fraudulent intent.

i. Explain what the intent states concerning money.

(Total 8 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Conversion, Criminal Law, Fraudulent Intent, Misappropriation, Stealing
Level: Level 1

Topic: Law of Trusts
Series: MAY 2024

Question Tag: Misappropriation

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AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

PSAF – Nov 2016 – L2 – Q4a – Government Expenditure

This question identifies various sources of loss of public funds in the public sector, focusing on misappropriation and fraud.

BL – May 2017 – L1 – SB – Q3c – Law of Tort

Assesses the criminal implications of Adikolu’s actions in collecting rent without authorization and selling house fixtures.

BL – May 2024 – L1 – SB – Q4c – Law of Trusts

This question tests candidates on the concept of conversion, particularly fraudulent intent with respect to money and misappropriation in criminal law.

AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

PSAF – Nov 2016 – L2 – Q4a – Government Expenditure

This question identifies various sources of loss of public funds in the public sector, focusing on misappropriation and fraud.

BL – May 2017 – L1 – SB – Q3c – Law of Tort

Assesses the criminal implications of Adikolu’s actions in collecting rent without authorization and selling house fixtures.

BL – May 2024 – L1 – SB – Q4c – Law of Trusts

This question tests candidates on the concept of conversion, particularly fraudulent intent with respect to money and misappropriation in criminal law.

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