 |
AUT621S- AUDITING 202- 2ND OPP- NOV 2023 |
|
|
1 Page 1 |
▲back to top |
nAmlBIA UnlVERSITY
OF SCIEnCE Ano TECHno LOGY
FACULTYOF COMMERCEH, UMAN SCIENCESAND EDUCATION
DEPARTMENTOF ECONOMICSA, CCOUNTING& FINANCE
QUALIFICATION: BACHELOROF ACCOUNTING
QUALIFICATIONCODE:07 BOAC
COURSE:AUDITING 202
DATE:JANUARY2024
DURATION: 3 HRS
LEVEL:6
COURSECODE:AUT 621S
SESSION:JANUARY2024
MARKS: 100
EXAMINER(S)
SECONDOPPORTUNITY
EXAMINATION QUESTIONPAPER
Kamotho, D.W., Hainghumbi, H.T. P
MODERATOR: Ms W Gertze
THIS QUESTION PAPERCONSISTSOF _7_ PAGES{including this front page)
INSTRUCTIONS
1. Answer all the questions in blue or black ink
2. Start each question on a new page in your answer booklet & show all your workings
3. Questions relating to this examination may be raised in the initial 30 minutes after the start
of the paper. Thereafter, candidates must use their initiative to deal with any perceived error or
ambiguities & any assumption made by the candidate should be clearly stated.
PERMISSIBLEMATERIALS
1. Nonprogrammable scientific or financial calculator
1
|
|
2 Page 2 |
▲back to top |
Question 1
(25 marks)
(a)
The IFAC Code of Ethics identifies that threats to audit/accounting practitioners'
fundamental principles may be created by a broad range of relationships and
circumstances. Discussthe following giving practical examples:
(i) Self-interest threat
(ii) Self-review threat
(iii) Advocacy threat
(iv) Familiarity threat
(v) Intimidation threat.
(10 marks)
(b) At times, a practitioner or professional accountant in public practise may be required
to resolve a conflict in complying with the fundamental principles of the IFAC Code of
Ethics. Discuss the steps a practitioner/professional should consider in order to ensure
compliance with the Code when initiating either a formal or informal conflict resolution
process.
(6 marks)
(c) The IFAC Code of Ethics states that professional fees shall be a fair reflection of the
value of the professional services performed for the client. Outline the factors which
should be considered when setting the fee for an audit engagement in order to comply
with the Code.
(4 marks)
(d) Discussfour inherent limitations of an internal control system.
(5 marks)
[Total: 25 Marks]
2
|
|
3 Page 3 |
▲back to top |
Question 2
(25 marks)
A substantial number of organisations in Namibia are required by law to have their
annual financial statements audited. The auditors are required to provide an audit
report that is published in the annual report of the organisation.
REQUIRED:
a) Describe the type of information an external audit report should provide
regarding the organisation and its financial statements.
(10 marks)
b) Discussthe purposes of an external audit to all relevant stakeholders.
(8 marks)
c) Explain the relationship between internal and external audit within an
organisation.
(7 marks)
[Total 25 marks)
3
|
|
4 Page 4 |
▲back to top |
Question 3
(30 marks)
You are a member of the "Governance and Regulation" department of your audit firm,
Prestige Auditors. The primary function of this department is to advise clients in respect
of their compliance with the matters of corporate governance, statutory and financial
reporting.
Your firm recently received a request from Benny Tjondu, the Chairman and the Chief
Executive Officer of Amand (Pty) Ltd, a large children's toy company. He requested a
meeting with you and your audit partner and at this meeting, he raised the following
concerns with you.
20% of the shareholding of Amand (Pty) Ltd is held by Hausiku Ltd, a listed company. The
board of Hausiku Ltd requires that Amand (Pty) Ltd comply with the recommendations of
the Namcode Report on Corporate Governance. Amand (Pty) Ltd needs to respond
positively to the request as the link with Hausiku Ltd provides significant benefits for the
company.
Benny expressed that he would like you to respond to some of the terminology that is
being used, such as inclusive approach to corporate governance, integrated reporting and
triple bottom line reporting. He also added that he would also like you to comment and
advise on certain aspects of the Corporate Governance structures.
The following information has been provided by Benny Tjondu with respect to the
structures in place at Amand (Pty) Ltd.
Board of Directors
The board consists of the following members:
• Benny Tjondu
• Peter Mason (Operations Director and Deputy Chairman)
• Jimmy Nghikevali (Marketing and Research Director)
• Peter Galepo (Financial Director)
• Emmanuel Ndautapo (non-executive director) - see note 1
• Absalom Peacock (Human Resources Director)
4
|
|
5 Page 5 |
▲back to top |
• Sebastian Namwandi (Non- Executive Director) - See note 2
• Susan Pohamba (Non-executive director) - see note 3
Note 1: Emmanuel Ndautapo is the major shareholder of Children's entertainment (Pty)
Ltd, Amand (Pty) Ltd.'s major customer.
Note 2: Sebastian Namwandi is the former financial director and deputy chairperson of
Amand (Pty) Ltd having retired at the end of the previous financial year end.
Note 3: Susan Pohamba is a partner in the law practice which advises Amand (Pty) Ltd on
legal matters.
Board Committees
Amand (Pty) Ltd uses board committees to a limited extent. Benny Tjondu made the
following remarks pertaining to the committees that you suggested to him:
Audit Committee
"I recently appointed the audit committee. The current members are myself, Peter
Galepo, Jimmy Nghikevali and Peter Mason. I am the chairperson of the committee. Peter
Galepo is on the committee to advise on any financial matters which the committee might
have to deal with. Jimmy Nghikevali, Peter Mason and I are Market Analysts and definitely
not accountants!"
Internal Audit
"We have an internal audit section. It is headed up by Nameva Tjondu, the Senior Internal
Audit Clerk. She has two assistants and reports directly to the financial controller. To be
perfectly honest, internal audit is regarded as rather low key and I suppose we will have
to remedy this if we are to comply with Hausiku's request."
5
|
|
6 Page 6 |
▲back to top |
REQUIRED:
a) Explain the following terms:
i. Inclusive approach to corporate governance
ii. Integrated reporting
iii. Triple Bottom Line reporting
{2 marks)
(4 marks)
(2 marks)
b) Discussthe composition of the Board of Directors of Amand (Pty) Ltd in terms of the
recommendations of the Namcode based on the information given above.
(12 marks)
c) Comment on the appointment and composition of the audit committee. (10 marks)
[Total 30 marks]
6
|
|
7 Page 7 |
▲back to top |
{
Question 4
(20 marks)
You have recently applied for the position of audit manager with a medium sized
practice in your area. The audit partner wishes to ensure that the successful candidate
has a good understanding of the impact of IT on the audit process and has requested
applicants to draft a report that:
REQUIRED:
(a) Discusseswhat is meant by an audit trail and explains why it is essential to both
management and auditors.
(5 marks)
(b) Illustrates, by making use of examples, the six typical uses of computer audit
software.
(6 marks)
(c) Outlines FIVEproblems associated with the use of computer audit software.
(5 marks)
(d) Distinguishes between general controls and application controls giving ONE example
of each.
(4 marks)
[Total: 20 Marks]
END OF QUESTION PAPER
7
|
|
8 Page 8 |
▲back to top |
