QUESTION ONE

(a) (i) Briefly explain the meaning of the term “audit” (2 marks)

(ii) What are the objectives of an audit according to the Companies Act? (3

marks)

(b) List four advantages to a company of having its accounts audited (4

marks)

(c) Identify and list the responsibilities of company directors in relation to the

company‟s accounting system. (6

marks)

(d) List five limitations of an audit (5 marks)

(Total: 20 marks)

QUESTION TWO

The internal control system encompasses all the policies and procedures adopted by

the management of an entity to assist it in achieving management objectives.

Required:

a) Identify and explain five management objectives that an internal control system

over sales aims to achieve (10 marks)

b) List and briefly explain five control objectives that an internal control system over

sales aims to achieve (5

marks)

c) Explain are the inherent limitations of an internal control system (5

marks)

(Total: 20 marks)

QUESTION THREE

a) Distinguish between a procedural audit and a balance sheet audit. (8 marks)

b) Explain the nature and purpose of a post-audit review (4 marks)

c) Identify the audit procedures which would need to be carried out in order to

identify material post – balance sheet events. (8

marks)

(Total: 20

marks)

QUESTION FOUR