Audit Challenges

AAA – L3 – Q72 – Public sector audit

Define cooperative audit, explain its reasons, types, and challenges for Nigeria Audit Service in a health program audit.

Question

The Nigeria Audit Service has been asked to perform a cooperative audit of funds from a donor that have been used in a women’s health education programme in schools. The program has been implemented across six countries in West Africa and aims to raise awareness of women’s health issues.

Required

(a) Define the term cooperative audit and explain reasons why this type of audit might be performed.

(b) Identify and explain the three types of cooperative audit as defined in GUID 9000 Cooperative Audits between SAIs.

(c) Discuss the difficulties the Nigeria Audit Service might encounter when performing the cooperative audit of donor funds used in the women’s health education programme.

Answer

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Tags: Audit Challenges, cooperative audit, donor funds, GUID 9000, supreme audit institutions
Level: Level 3

Topic: Public sector audit

AAA – L3 – Q69 – Audit-related services

Discuss the view that small businesses are unauditable due to their nature versus the benefits of auditor involvement.

Question

There is a view held by some, that small businesses are unauditable by their very nature. However, others would say that because the auditor of a small business is much more closely involved with his client, his knowledge of that client is extensive and he is therefore better placed to audit it, whereas larger audits are much more mechanical.

Required

Discuss.

Answer

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Tags: Audit, Audit Challenges, Audit-related services, Auditor involvement, Small businesses
Level: Level 3

Topic: Audit-Related Services

AA – L2 – Q58 – Auditing in a Computerized Environment

Explain benefits of using audit software in the audit of Peak Ltd's inventory systems.

Question

Cal & Co has been appointed as the auditor for Mount Co, a company providing motor vehicle repair services across 25 locations, with a year-end of 30 June 2009 and an audit completion deadline of 15 August 2009. Each location uses the same computerized inventory, sales, and purchasing systems, with data consolidated monthly at the head office. The audit manager is planning the audit approach, considering rewriting Cal & Co’s audit software to test Mount Co’s inventory systems on a live basis. However, July is a major holiday period for the audit firm, posing potential resource constraints

(a) (i) Explain the benefits of using audit software in the audit of Peak Ltd.

(a) (ii) Explain the problems that may be encountered in the audit of Peak Ltd and for each problem, explain how that problem could be overcome.

(b) Following a discussion with the management at Peak Ltd you now understand that the internal audit function is prepared to assist with the statutory specification on the computerised inventory systems at Peak Ltd. Documentation provides details of the software and shows diagrammatically transactions are processed through the inventory system. This documentation can be used to significantly decrease the time needed to understand the computer systems and enable audit software to be written for this year’s audit.

Required:

Explain how you will evaluate the computer systems documentation produced by the internal audit function in order to place reliance on it during your audit.

Answer

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Tags: Audit Challenges, Audit Planning, Software Development, Time Constraints
Level: Level 2

Topic: Audit Evidence

Tag (SQ): Audit Challenges

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AAA – L3 – Q72 – Public sector audit

Define cooperative audit, explain its reasons, types, and challenges for Nigeria Audit Service in a health program audit.

AAA – L3 – Q69 – Audit-related services

Discuss the view that small businesses are unauditable due to their nature versus the benefits of auditor involvement.

AA – L2 – Q58 – Auditing in a Computerized Environment

Explain benefits of using audit software in the audit of Peak Ltd's inventory systems.

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AAA – L3 – Q72 – Public sector audit

Define cooperative audit, explain its reasons, types, and challenges for Nigeria Audit Service in a health program audit.

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AAA – L3 – Q69 – Audit-related services

Discuss the view that small businesses are unauditable due to their nature versus the benefits of auditor involvement.

You're reporting an error for "AAA – L3 – Q69 – Audit-related services"

AA – L2 – Q58 – Auditing in a Computerized Environment

Explain benefits of using audit software in the audit of Peak Ltd's inventory systems.

You're reporting an error for "AA – L2 – Q58 – Auditing in a Computerized Environment"

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