What are the various types of verification which an auditors can select while developing tests of control for audit work? Also differentiate between them? 3marks
Suppose you have been appointed as an auditor of a listed company. Before starting control tests of the payroll system, what control objectives would you define in respect of the payroll system? 3marks
The accounting records of a company are no more verifiable due to the major IT system collapse during the current financial year. The company does not have proper manual records. Although the integrity of the management is not in doubt, but the auditor is not in a position to substantiate management’s assertions contained in the financial statements. What type of opinion should be expressed in these circumstances? 3marks
Suppose you have been appointed as an auditor of a trading company. Explain any three substantive procedures you might carry out in the verification of inventory of this company. 3marks
What internal control procedures can be implemented over payroll system of a manufacturing concern in compliance with prevailing auditing standards? 5marks
Suppose you have been appointed as auditor of Chand Sitara Textile Limited. During the testing of procurement system you found some discrepancies in the records. According to your knowledge of auditing standards, why you will check numerical sequence during the test of control and also name at least four examples of purchase documents on which numerical sequence should be checked for Chand Sitara Textile Limited? 5marks
Discuss the factors which influence auditor’s judgment regarding the sample size for applying tests of control. 5marks
Discuss different types of limitation of scope of an audit that may result in a modified opinion giving suitable instances of each. 5marks
Suppose you have been appointed as an auditor of a listed company. Before starting control tests of the payroll system, what control objectives would you define in respect of the payroll system? 3marks
The accounting records of a company are no more verifiable due to the major IT system collapse during the current financial year. The company does not have proper manual records. Although the integrity of the management is not in doubt, but the auditor is not in a position to substantiate management’s assertions contained in the financial statements. What type of opinion should be expressed in these circumstances? 3marks
Suppose you have been appointed as an auditor of a trading company. Explain any three substantive procedures you might carry out in the verification of inventory of this company. 3marks
What internal control procedures can be implemented over payroll system of a manufacturing concern in compliance with prevailing auditing standards? 5marks
Suppose you have been appointed as auditor of Chand Sitara Textile Limited. During the testing of procurement system you found some discrepancies in the records. According to your knowledge of auditing standards, why you will check numerical sequence during the test of control and also name at least four examples of purchase documents on which numerical sequence should be checked for Chand Sitara Textile Limited? 5marks
Discuss the factors which influence auditor’s judgment regarding the sample size for applying tests of control. 5marks
Discuss different types of limitation of scope of an audit that may result in a modified opinion giving suitable instances of each. 5marks
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