Auditing
GREAT ZIMBABWE UNIVERSITY FACULTY OF COMMERCE DEPARTMENT OF ACCOUNTING AND FINANCE
COURSE CODE: AC211
COURSE TITLE: AUDITING THEORY AND PRACTICE
ASSIGNMENT FIRST SEMESTER 2014
QUESTION 1
Brian Ltd was formed on November 2013 in order to manufacture microchips. The directors are unsure of their responsibilities and the nature of their relationship with the external auditors. The audit partner has ask you to visit the client and explain to the directors the more fundamental aspects of the accountability of the company and their relationship with the auditor.
Required
Through a memorandum, explain to the directors
(a ) Why is the need for an audit. (5 marks)
(b ) how the auditor of a public company may be appointed under the companies Act (5 marks)
( c ) What are the rights and powers of an auditor under the Companies Act (10 marks )
(d ) The responsibilities of the directors in relation to the accounting ,fraud and internal controls functions of Brian Ltd. (10 marks )
QUESTION 2
The maintenance of auditor independence is vital to the credibility of the audit in the minds of the users of the financial statements .Professional regulations has been seen as being one of the more acceptable methods of acceptable methods of achieving auditor independence than state regulations although certain sections of the Companies ‘s Act have a bearing on such independence.
( a ) state and explain the two sides of auditor independence (8 marks )
(b ) Explain the circumstance that may threaten auditor ‘ independence and objectivity(10 marks )
( c) Explain some the measures that auditors may implement in order to deal with the threats (12 marks)
Question 3 The directors of Melton Manufacturing have asked your firm to act as their auditors for the year ended 30 September. They will be asking their existing auditors to resign, as they do not provide a cost effective service. The partner proposed for appointment
COURSE CODE: AC211
COURSE TITLE: AUDITING THEORY AND PRACTICE
ASSIGNMENT FIRST SEMESTER 2014
QUESTION 1
Brian Ltd was formed on November 2013 in order to manufacture microchips. The directors are unsure of their responsibilities and the nature of their relationship with the external auditors. The audit partner has ask you to visit the client and explain to the directors the more fundamental aspects of the accountability of the company and their relationship with the auditor.
Required
Through a memorandum, explain to the directors
(a ) Why is the need for an audit. (5 marks)
(b ) how the auditor of a public company may be appointed under the companies Act (5 marks)
( c ) What are the rights and powers of an auditor under the Companies Act (10 marks )
(d ) The responsibilities of the directors in relation to the accounting ,fraud and internal controls functions of Brian Ltd. (10 marks )
QUESTION 2
The maintenance of auditor independence is vital to the credibility of the audit in the minds of the users of the financial statements .Professional regulations has been seen as being one of the more acceptable methods of acceptable methods of achieving auditor independence than state regulations although certain sections of the Companies ‘s Act have a bearing on such independence.
( a ) state and explain the two sides of auditor independence (8 marks )
(b ) Explain the circumstance that may threaten auditor ‘ independence and objectivity(10 marks )
( c) Explain some the measures that auditors may implement in order to deal with the threats (12 marks)
Question 3 The directors of Melton Manufacturing have asked your firm to act as their auditors for the year ended 30 September. They will be asking their existing auditors to resign, as they do not provide a cost effective service. The partner proposed for appointment