MAY 2013 – Page 7

AAA – Nov 2013 – L3 – SB – Q6 – Auditor’s Legal Liability

Discuss criminal charges against accountants, reasons auditors prefer out-of-court settlements, and the disadvantages of such settlements.

Question

Auditors’ liabilities may arise under common law and statute. Statutory liability may be civil or criminal. Professional accountants are increasingly guiding against incidences of litigation that may impact negatively on their work.

You are required to:

(a) Outline SIX ways through which accountants may be charged for criminal offenses. (6 Marks)

(b) Explain SIX reasons why auditors are willing to settle legal matters with their clients out of court. (6 Marks)

(c) State THREE disadvantages of an out-of-court settlement. (3 Marks)

(Total: 15 Marks)

Answer

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Tags: Auditor Liability, criminal offenses, legal considerations, Litigation, Out of Court Settlement, Professional Ethics
Level: Level 3

Topic: Auditor’s Legal Liability
Series: MAY 2013

AAA – Nov 2013 – L3 – AII – Q2 – Audit Evidence

Audit Evidence, Balance Confirmation, Reporting Dates, Discrepancy, Fraud

Question

A reported difference in a confirmation of balances by a debtor to a client due to different reporting date but not due to misstatement or fraud is known as………………….

Answer

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Tags: Audit evidence, Balance Confirmation, Discrepancy, Fraud, Reporting Dates
Level: Level 3

Topic: Audit evidence
Series: MAY 2013, NOV 2013

BL – May 2013 – L1 – SB – Q6C – Law of Trusts

Explain the reporting duty of a bank and stockbroker in cross-border transfers involving Dr. Aminu.

Question

Dr. Aminu recently transferred the sum of US$11,000 to his account in Business Bank Plc, Lagos, from his bank in the United States. He also informed his stockbroker of his intention to transfer his shares in some Nigerian companies listed on the New York Stock Exchange to his C.S.C.S. account with the stockbroker in Nigeria. The shares are valued at US$20,000.

You are required to:

Explain the reporting duty of Business Bank Plc and the stockbroker.

Answer

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Tags: Bank Transfers, Cross-Border Transactions, Nigerian Law, Reporting Duty
Level: Level 1

Topic: Law of Trusts
Series: MAY 2013

BL – May 2013 – L1 – SB – Q6B – Law of Trusts

Explain the duties of trustees regarding the disbursement of trust funds to beneficiaries.

Question

Biodun and Johanna are twins of twenty-one years of age. By the Will of their deceased father that came into effect ten years ago, the trustees were directed to invest a sum of N5 million and apply the income to the education of Biodun and Johanna. These beneficiaries have directed that the trustees pay the N5 million over to them.

You are required to:

Explain the duty of the trustees in relation to the directive of Biodun and Johanna.

Answer

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Tags: Disbursement, Trust Funds, Trustees
Level: Level 1

Topic: Law of Trusts
Series: MAY 2013

BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

Question

Explain THREE reasons for which a creditor shall be entitled to present a bankruptcy petition against a debtor.

Answer

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Tags: Bankruptcy, Creditor’s Petition, Liquidated Debt
Level: Level 1

Topic: Law Relating to Banking
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5D – Company Law

Explain the procedure to fill a casual vacancy in the office of the company’s auditor.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

What should be done where there is a casual vacancy in the offices of the auditors?

Answer

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Tags: Auditor, Casual Vacancy, Company Law
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5C – Company Law

Discuss what happens if no auditors are appointed at the AGM.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

What happens if, at an Annual General Meeting, no auditors were appointed or re-appointed?

Answer

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Tags: Company Law, Failure to Appoint Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5B – Company Law

Explain how existing auditors can be re-appointed without objection at the AGM.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

How would the existing auditors of the company, desirous of re-election at the next Annual General Meeting, and without objection, be re-appointed?

Answer

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Tags: Company Law, Re-Appointment of Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q5A – Company Law

Explain how the first auditors of a company are appointed.

Question

Chief Ogongo, the Chairman of the recently incorporated Fortune Finance Limited,
has requested your advice on the appointment of auditors of the company,
particularly on the following issues:

How will the first auditors of the company be appointed?

Answer

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Tags: Appointment of Auditors, Company Law, First Auditors
Level: Level 1

Topic: Company Law
Series: MAY 2013

BL – May 2013 – L1 – SB – Q4B – Company Law

Explain two conditions Harddin Limited must fulfill to invite public subscription.

Question

Harddin Limited has informed you of its intention to invite the public to acquire its securities and to deposit money with it for a fixed period payable at call.

You are required to:

Explain TWO conditions that Harddin Limited must fulfill to achieve its proposed plan.

Answer

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Tags: Company Conversion, Investment and Securities Act, Public Subscription
Level: Level 1

Topic: Company Law
Series: MAY 2013

FA – May 2013 – L1 – SB – Q2 – Roles of Accountants in Business and the Economy

This question discusses the various roles played by accountants in an organization.

Question

a. Most Organizations require the services of an accountant. State FIVE roles of an accountant in an Organization. (5 Marks)

b. Yaro Chukwu Plc is a manufacturing company based in Ile-Ife. It commenced business in 2008 with five vehicles costing N650,000 each. The company depreciates its assets at 20% on cost, using straight line method by providing full depreciation in the year of purchase and none in the year of disposal. Another vehicle costing N900,000 was purchased in 2009 to replace the one
sold in 2008 for N450,000, while the company still maintains its depreciation policy.
You are required to prepare:
i. Motor vehicle account up to 31 December 2012 (4 Marks)
ii. Disposal of Assets Account (2 Marks)
iii. Provision for depreciation account up to 31 December 2012 (4 Marks)

Answer

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Tags: Accountants, Decision Making, Financial Reporting
Level: Level 1

Topic: Roles of Accountants in Business and the Economy
Series: MAY 2013

FA – May 2013 – L1 – SB – Q1 – Regulatory Environment of Accounting

This question discusses the challenges and roles involved in the adoption of IFRS in Nigeria.

Question

The Financial Reporting Council of Nigeria Act, 2011, replaced the Nigeria Accounting Standards Board Act, No 22 of 2003.

This new body is charged with the responsibility for developing and publishing Accounting and Financial Reporting Standards to be observed in the preparation of Financial Statements of public entities in Nigeria and for related matters.

a. State FIVE challenges of adopting International Financial Reporting Standards (IFRS) in Nigeria. (10 Marks)
b. Identify FIVE roles of the Financial Reporting Council of Nigeria. (5 Marks)

Answer

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Tags: Financial Reporting Council of Nigeria, Financial Standards, IFRS Adoption
Level: Level 1

Topic: Regulatory Environment of Accounting
Series: MAY 2013

FA – May 2013 – L1 – SA – Q40 – Accounting Concepts

This question tests knowledge of the accounting entry for goods sent to a branch by the head office.

Question

A head office sent goods at cost plus mark-up of 25% to the branch. The invoice price of the goods was N289,200. During the period, the branch returned N10,000 worth of goods to the Head office

State the account to be credited with goods returned to Head office by the branch and at what value?

Answer

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Tags: Branch accounts, Goods Sent
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2013

FA – May 2013 – L1 – SA – Q39 – Accounting Concepts

This question tests knowledge of the accounting treatment for goods returned by a branch to the head office.

Question

A head office sent goods at cost plus mark-up of 25% to the branch. The invoice price of the goods was N289,200. During the period, the branch returned N10,000 worth of goods to the Head office

What is the value of goods that should be credited to branch account during the period?

Answer

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Tags: Branch accounts, Goods Returned
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2013

FA – May 2013 – L1 – SA – Q38 – Virtual Accounting: Digitisation

This question tests knowledge of integrated accounting software.

Question

An integrated accounting software is one of the examples of:

Answer

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Tags: Accounting Software, Integrated Systems
Level: Level 1

Topic: Virtual Accounting: Digitisation
Series: MAY 2013

FA – May 2013 – L1 – SA – Q37 – Accounting Concepts

This question defines the term for the portion of share capital that has been received from shareholders.

Question

The portion of Called-up Share Capital which has been received from the subscribers to a company’s ordinary or preference shares is called:

Answer

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Tags: Called-Up Share Capital, Paid-Up Capital
Level: Level 1

Topic: Accounting Concepts
Series: MAY 2013

FA – May 2013 – L1 – SA – Q36 – Partnership Accounts

This question defines the role of a nominal partner in a partnership.

Question

A partner who does not contribute money into a partnership but allows his name to be used in the running of the business is called:

Answer

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Tags: Nominal Partner, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2013

FA – May 2013 – L1 – SA – Q35 – Partnership Accounts

This question asks for a partner’s share of the profit or loss on realisation.

Question

What is Hassan’s share of profit or loss on realisation?

Answer

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Tags: Partnership, Profit Sharing, Realisation Profit
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2013

FA – May 2013 – L1 – SA – Q34 – Partnership Accounts

This question asks for the calculation of profit or loss on realisation in a partnership.

Question

Calculate the profit or loss on realisation attributable to the partnership.

Answer

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Tags: Partnership, Realisation Profit
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2013

FA – May 2013 – L1 – SA – Q33 – Partnership Accounts

This question tests the double-entry treatment when a partner introduces a non-current asset into a partnership.

Question

When a partner introduces a non-current asset into a partnership business, the accounting entries will be:

Answer

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Tags: Double Entry, Non-Current Asset, Partnership
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2013

Series: MAY 2013

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AAA – Nov 2013 – L3 – SB – Q6 – Auditor’s Legal Liability

Discuss criminal charges against accountants, reasons auditors prefer out-of-court settlements, and the disadvantages of such settlements.

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AAA – Nov 2013 – L3 – AII – Q2 – Audit Evidence

Audit Evidence, Balance Confirmation, Reporting Dates, Discrepancy, Fraud

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BL – May 2013 – L1 – SB – Q6C – Law of Trusts

Explain the reporting duty of a bank and stockbroker in cross-border transfers involving Dr. Aminu.

You're reporting an error for "BL – May 2013 – L1 – SB – Q6C – Law of Trusts"

BL – May 2013 – L1 – SB – Q6B – Law of Trusts

Explain the duties of trustees regarding the disbursement of trust funds to beneficiaries.

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BL – May 2013 – L1 – SB – Q6A – Law Relating to Banking

State three reasons a creditor may present a bankruptcy petition against a debtor.

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BL – May 2013 – L1 – SB – Q5D – Company Law

Explain the procedure to fill a casual vacancy in the office of the company’s auditor.

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BL – May 2013 – L1 – SB – Q5C – Company Law

Discuss what happens if no auditors are appointed at the AGM.

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BL – May 2013 – L1 – SB – Q5B – Company Law

Explain how existing auditors can be re-appointed without objection at the AGM.

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BL – May 2013 – L1 – SB – Q5A – Company Law

Explain how the first auditors of a company are appointed.

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BL – May 2013 – L1 – SB – Q4B – Company Law

Explain two conditions Harddin Limited must fulfill to invite public subscription.

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FA – May 2013 – L1 – SB – Q2 – Roles of Accountants in Business and the Economy

This question discusses the various roles played by accountants in an organization.

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FA – May 2013 – L1 – SB – Q1 – Regulatory Environment of Accounting

This question discusses the challenges and roles involved in the adoption of IFRS in Nigeria.

You're reporting an error for "FA – May 2013 – L1 – SB – Q1 – Regulatory Environment of Accounting"

FA – May 2013 – L1 – SA – Q40 – Accounting Concepts

This question tests knowledge of the accounting entry for goods sent to a branch by the head office.

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FA – May 2013 – L1 – SA – Q39 – Accounting Concepts

This question tests knowledge of the accounting treatment for goods returned by a branch to the head office.

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FA – May 2013 – L1 – SA – Q38 – Virtual Accounting: Digitisation

This question tests knowledge of integrated accounting software.

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FA – May 2013 – L1 – SA – Q37 – Accounting Concepts

This question defines the term for the portion of share capital that has been received from shareholders.

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FA – May 2013 – L1 – SA – Q36 – Partnership Accounts

This question defines the role of a nominal partner in a partnership.

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FA – May 2013 – L1 – SA – Q35 – Partnership Accounts

This question asks for a partner’s share of the profit or loss on realisation.

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FA – May 2013 – L1 – SA – Q34 – Partnership Accounts

This question asks for the calculation of profit or loss on realisation in a partnership.

You're reporting an error for "FA – May 2013 – L1 – SA – Q34 – Partnership Accounts"

FA – May 2013 – L1 – SA – Q33 – Partnership Accounts

This question tests the double-entry treatment when a partner introduces a non-current asset into a partnership.

You're reporting an error for "FA – May 2013 – L1 – SA – Q33 – Partnership Accounts"

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