...SAMPLE RESEARCH PROPOSAL PROMOTING GOOD GOVERNANCE IN PUBLIC INSTITUTIONS OF GHANA: THE ROLE OF THE INTERNAL AUDITOR 5/5/2009 SCHOOL OF BUSINESS, UNIVERSITY OF CAPE COAST, GHANA ISHMEAL OFORI AMPONSAH (STUDENT) Table of Contents Introduction........................................................................................ ........................3 Background of the Study ........................................................................................3 Problem Statement............................................................................................ ......4 Research Questions: .................................................................................. .........4 Hypothesis:..........................................................................................................4 Objectives............................................................................................................... .5 Significance of Study............................................................................... ................5 Literature Review.................................................................................................... ....6 Definition of Internal Audit...................................................................................6 Role of the Internal Auditor in governance ..........................................................7 Methodology...........................................................................
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...Time: 4 Hours Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 11/2 marks each a. An attitude of “professional scepticism” is necessary if a CGA is to perform an audit engagement with due care. Which of the following best describes how a CGA may display an attitude of “professional scepticism” when performing an audit engagement? 1) 2) 3) 4) By assuming that management is dishonest in the absence of evidence to the contrary By not allowing clients’ staff to assist in the performance of an audit By rejecting all management assertions in the absence of supporting evidence By questioning all material assertions made by management b. Which of the following steps or modifications to an audit program is likely to be the most appropriate if an auditor assesses the risk of management fraud to be relatively high? 1) 2) 3) 4) c. Performing relatively less audit work at interim dates Placing greater reliance on management’s representations Performing less extensive tests of internal controls Assigning less experienced personnel to the engagement Generalized audit software, such...
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...4 Quiz 1. Auditors will never use their own judgments in selecting items for testing (True/False). (10%) False 2. Name the two types of audit sampling. (30%) Statistical and Non-Statistical 3. List the three types of statistical sampling. (30%) Simple random, stratified, and cluster sampling 4. Name three non-statistical sample selection methods. (30%) Block sampling, haphazard sampling, random number sampling 10/10 = 100% Week 4 Multiple Choice 1. In an audit sampling application, an auditor a) Performs procedures on all items in a balance and makes a conclusion about the entire balance. b) Performs procedures on less than 100 percent of the items in a balance and formulates a conclusion about the entire balance. c) Performs procedures on less than 100 percent of the items in a class of transactions to become familiar with the client's accounting system. d) Performs analytical procedures on the client's unaudited financial statements when planning the audit. 2. Auditors consider statistical sampling to be characterized by the following: a) Representative sample selection and nonmathematical consideration of the results. b) Carefully biased sample selection and mathematical calculation of the results. c) Representative sample selection and mathematical calculation of the results. d) Carefully biased sample selection and nonmathematical consideration of the results. 3. In which of the following scenarios would the use of sampling be most appropriate...
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... | | |Details of Subject | |Qualification |FNS60210 Advanced Diploma of Accounting | |Subject Name |Auditing and Reporting | |Details of Unit(s) of competency | |Unit Code |FNSACC602A |Unit Title |Audit and Report on Financial systems and records | |Details of Student | |Student Name | |Student ID | | |College | | |Student Declaration: I declare that the work submitted is my own, |Signature:...
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...relating to the first two controls: [a] Is it acceptable to use the same set of transactions and the same sample size to test two different controls? 1. a. Darrell should not resort to using the same set of transactions and same sample size to test the first two controls. Although all sales pass through both controls and the tolerable deviation rate is the same, the expected population deviation rate varies, meaning that Darrell should use a new randomly chosen set of transactions for the second control. In the first control, since it is moderately important the deviation rate is targeted at 8%. The population deviation rate is set at 1%, indicating that a sample size of 58 should be used, with an allowance for 1 deviation and still be assumed tolerable. In the second control, the tolerable deviation rate is still set a 8%, although now the population deviation rate is set at 2%, increasing the sample size up to a set of 77 transactions. In addition, there is now an allowance for 2 deviations within the set. [b] Do you agree with Darrell’s conclusions with respect to these first two controls? If not, why not? In evaluating Darrell’s conclusions, you may wish to refer to the attribute sampling evaluation table available in Appendix A. b. Darrell’s conclusions regarding the first two controls are not entirely accurate. Because he did not test using the right sample size, his conclusions cannot be relied upon. For the first control, Darrell concluded that the test is operating...
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...Question HHH Negligence Element • There must be a duty care owed to the party suing the auditor. • There must be a breach of duty of care (failure to follow GAAS, negligent audit). • There must be proof that the party suffered a loss or damage • There must be a connection between the party’s loss or damage and the breach of the duty. Question A HHH Company’s Case • HHH hired the auditors; therefore the auditors owe a duty of case to the shareholders. • The shareholders would have to show that the auditors were negligent in their audit, that is, the auditor issued an unqualified report even though there is a misstatement in the financial statements. • HHH lost its investment in the commodities • HHH shareholders would have to show that they suffered the loss due to the auditor’s negligence. Question A • Each store is managed by an owner of the business, which suggests that an external audit is not required. • The company is not public, so there is no statutory requirement for an audit. • If the company borrows from an outside source, then an external audit may be a requirement by the lender. • The existing shareholders are already creditors of the company, and they may wish to have an audit. Question B • Collusion requires 2 or more people to work together to circumvent the controls. In this case, the 2 purchasing clerks could have colluded by having 1 clerk record a false vendor number on the invoice and then the other clerk prepare the payment to M. Smith. • This...
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...tQUESTION 2 (JANUARY 2012) 2. B) Materiality is the magnitude of omission or misstatement of accounting information that in light of surrounding circumstances which could influence the economic decision users and matter that can affect professional judgment. Audit risk model provides the foundation for the current emphasis on the risk-based audit account balance or class of transaction. Audit risk model can be specified as, AUDIT RISK = INHERENT RISK x CONTROL RISK x DETECTION RISK Inherent risk is the measure of the auditor’s assessment of the possibility that there is material misstatement in an account balance before taking into account the effectiveness of internal control. Control risk is the risk that material misstatement will not be prevented or detected on a timely basis by an entity’s internal control. Detection risk is the risk that the substantive audit procedures performed will not detect a material misstatement that exists in an account balance or class of transactions. 2. C) i) Inherent risk incurred from enviroment of business or likehood that a material misstatement exist in the financial statement without any consideration of internal control.it is due to economic downturn, the slow collection of debt from the government has increased the level of debt. ii) control risk is the that material misstatement that could occur will not be prevented or detected and corrected by in ternal controls. In this case,it occur when the company do not...
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...Solutions for Chapter 8 Tools to Gather Audit Evidence Review Questions: 8-1. The three main tools the auditor might use in gathering and evaluating audit evidence are: • Audit sampling • Generalized Audit Software • Analytical procedures 8-2. Non-sampling risk is the risk that the auditor makes an improper assessment of inherent and/or control risk or did not apply audit procedures carefully. It can be minimized through: (1) Good hiring, training and supervision practices; and (2) Careful and knowledgeable review of audit documentation and audit procedures. Sampling risk is the risk that the misstatement projections based on the sample results lead to the wrong conclusion about the population because of a non-representative sample. Sampling risk can be reduced by increasing the sample size – to the extreme of auditing the entire population therefore eliminating sampling risk altogether. 8-3. Factors to consider when choosing between statistical and nonstatistical sampling include: • Need to quantify and control sampling risks. • Additional cost of designing, selecting, and evaluating a statistical sample. • Availability of computer software to assist in designing, selecting, and/or evaluating the sample. • Ability of the audit staff to properly implement statistical sampling. 8-4. a. Tolerable deviation rate depends on the significance of the control procedure being tested...
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...Canadian Building Supplies Ltd. – CAATs SUGGESTED SOLUTION GAS: General Audit Software: In the text below when data is required it will be assumed to be taken from the company by us using GAS. GAS is a software that assists with a continuous auditing by acting as a control catch the possible error and proves an audit trail. The auditor trail in this case is of particular importance due to the structure of their business by having separate sales and warehouse branches and many items sales to keep track of. Tests, Data and Objectives for the Accounts Receivable File The five tests we recommend for the accounts receivable file are as follows: 1. Analytical Procedures Audit Objective: All of them because it provides for a holistic image of the account. Audit Test: This test will require investigating significant changes or trends in the accounts receivable balance. This involves looking into the aging of accounts receivable by customer; credit balances in accounts receivable; other unexpected variations. This would also involve comparing financial ratios and year-over-year comparisons. Finally one must document their findings. Data Required: Previous year and current year financial statements, receivable listings by customer account/balance, aging schedule of receivables, etc. 2. Obtain a detailed (and aged) listing of receivables at the period-end (Delinquent Accounts) Audit Objective: Accuracy Audit Test: This test involves checking the arithmetic accuracy and the accounts receivable...
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...Social Audit: A Toolkit A Guide for Performance Improvement and Outcome Measurement CENTRE FOR GOOD GOVERNANCE Knowledge Technology People Social Audit: A Toolkit No part of this book may be reproduced in any form without permission in writing from the publisher, except by a reviewer or a research scholar who may quote brief passages in a review in a magazine or a newspaper or for research purposes as the case may be. Copyright CGG 2005 Printed and published by the Director General & Executive Director, Centre for Good Governance Dr MCR HRD IAP Campus, Road No. 25, Jubilee Hills, Hyderabad 500 033. 2 |||Social Audit: A Toolkit| |||||| |||||| |||||| ||Contents|||| |Preface|||| |List of abbreviations|||| SECTION – I. SOCIAL AUDIT EXPLAINED|7|| 1.|Introduction to Social Audit|9| 2.|Accountability Mechanisms: Cases from India|10|| 3.|Social Audit Vs Other Audits|13|| 4.|History of Social Audit|14|| 5.|Stakeholders and Social Audit|15|| 6.|Principles of Social Audit|17|| 7.|Uses and Functions of Social Audit|18|| 8.|Benefits of Social Auditing for Government Departments|19|| 9.|The Design and Methodology|20|| 10.|Social Audit for Government of Andhra Pradesh|21|| 11.|Good Governance and Social Audit|22|| 12.|Social Auditing and Performance Evaluation|24|| 13.|How does Social Audit work?|25|| 14.|Who can use Social Audit?|26|| 15.|Social Audit and Social Capital|27|| 16.|Designing...
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...CGA-CANADA ADVANCED EXTERNAL AUDITING [AU2] EXAMINATION December 2010 Marks 30 Time: 4 Hours Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 11/2 marks each a. Which of the following opinions is an auditor most likely to issue when he or she found a material misstatement in a client’s opening balances during an initial audit engagement, but has determined that the balance sheet accounts at the end of the fiscal year are not materially misstated? 1) 2) 3) 4) An unqualified opinion modified by an explanatory paragraph A qualified (GAAP) opinion A qualified (scope) opinion An adverse opinion b. Which of the following situations is most likely to represent an attitude risk factor, in the context of the fraud triangle model of material financial reporting fraud? 1) 2) 3) 4) c. Significant managerial judgment needed to determine an estimated account balance Major unusual transactions recorded by management Aggressive managers who unduly emphasize meeting quantitative earnings targets Inadequate profitability Which of the following elements is not an example of an organization and management...
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...choice questions recently released by the AICPA. These questions were released by the AICPA with letter answers only. Our editorial board has provided the accompanying explanations. Please note that the AICPA generally releases questions that it does NOT intend to use again. These questions and content may or may not be representative of questions you may see on any upcoming exams. 2007 AICPA Newly Released Questions – Auditing 1. CPA-05465 Which of the following categories is included in generally accepted auditing standards? a. b. c. d. Standards of review. Standards of planning. Standards of fieldwork. Standards of evidence. ANSWER: Choice "c" is correct. Generally accepted auditing standards include three categories: general standards, standards of fieldwork, and standards of reporting. Choices "a", "b", and "d" are incorrect, based on the above explanation. 1 2007 AICPA Newly Released Questions – Auditing 2. CPA-05466 A retailing entity uses the Internet to execute and record its purchase transactions. The entity's auditor recognizes that the documentation of details of transactions will be retained for only a short period of time. To compensate for this limitation, the auditor most likely would: a. b. c. d. Compare a sample of paid vendors' invoices to the receiving records at year-end. Plan for a large measure of tolerable misstatement in substantive tests. Perform tests several times during the year, rather than only at year-end. Increase the sample of transactions...
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...causes the financial statements taken as a whole to be materially misstated. d. Understand the events and transactions that may have an effect on the client's financial statements. 2. Prior to beginning the field work on a new audit engagement in which a CPA does not possess expertise in the industry in which the client operates, the CPA should a. Reduce audit risk by lowering the preliminary levels of materiality. b. Design special substantive tests to compensate for the lack of industry expertise. c. Engage financial experts familiar with the nature of the industry. d. Obtain a knowledge of matters that relate to the nature of the entity's business. 3. Which of the following factors most likely would cause an auditor not to accept a new audit engagement? a. An inadequate understanding of the entity's internal control structure. b. The close proximity to the end of the entity's fiscal year. c. Concluding that the entity's management probably lacks integrity. d. An inability to perform preliminary analytical procedures before assessing control risk. 4. Before accepting an engagement to audit a new client, an auditor is required to a. Make inquiries of the predecessor auditor after obtaining the consent of the prospective client. b. Obtain the prospective client's signature to the engagement...
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...Question 1 (3 marks) The chair of the board of Hughes Corporation proposed that the board hire as controller a PA who had been the manager on the corporation’s external financial statement audit. The chair thought that hiring this person would reduce the cost of the annual audit and consequently save the company at least half of the fee paid to the auditors. The chair proposed giving this new controller a full staff to conduct investigations of accounting and operating data as necessary. Required Evaluate this proposal. Question 2 ( 3 marks) Your neighbor invited you to lunch yesterday. Sure enough it was no “free lunch” because he wanted to discuss the annual report of the Dodge Corporation. He owns Dodge Corporation shares and just received the annual report. He says “PricewaterhouseCoopers prepared the audited financial statements and gave an unqualified opinion, so my investment must be safe.” Required What misconceptions does your neighbour seem to have about the auditor’s role with respect to Dodge Corporation? Question 3 (13 marks) You work for a large public accounting firm with many offices across the country. As part of your new job as a senior manager in the national office, you have been assigned to do a quality control review of the Pop Shop Company audit file, for the audit conducted by one of your offices in north west Manitoba. Your firm has been auditing the Pop Shop Company for the last four years, ever since Pop Shop went public...
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...False Questions 1. | Independence standards are required for audits of public companies, but not for audits of private companies. True False | 2. | Decision makers demand reliable information that is provided by accountants. True False | 3. | Information asymmetry seldom occurs. True False | 4. | Conflicts of interest often occur between absentee owners and managers. True False | 5. | Auditing services and attestation services are the same. True False | 6. | Auditing is a type of attest service. True False | 7. | Testing all transactions that occurred during the period is cost prohibitive. True False | Multiple Choice Questions 8. | Why do auditors generally use a sampling approach to evidence gathering? A. | Auditors are experts and do not need to look at much to know whether the financial statements are correct or not. | B. | Auditors must balance the cost of the audit with the need for precision. | C. | Auditors must limit their exposure to their auditee to maintain independence. | D. | The auditor's relationship with the auditee is generally adversarial, so the auditor will not have access to all of the financial information of the company. | | 9. | Which of the following statements best describes a relationship between sample size and other elements of auditing? A. | If materiality increases, so will the sample size. | B. | If the desired level of assurance increases, sample sizes...
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