Company A has a number of long and short-term payables, accruals and provisions in its balance sheet. Required: Describe the audit procedures you would apply to each of the three items listed below, including those relating to disclosure. i)A 10-year bank loan with a variable interest rate and an overdraft […]

Flowers Anytime sells flowers wholesale. Customers telephone the company and their orders are taken by clerks who take details of the flowers to be delivered, the address to which they are to be delivered, and account details of the customer. The clerks input these details into the company’s computer system […]

List and explain any three deductions that may be available against gains or profits from employment

i) Mr. Ali Ming is a hardware merchant. He purchases cement from Athi Cement Ltd. which he then sells to his customers. Both Ali Ming and Athi Cement Ltd. require a profit margin of 20% on cost. Cement attracts 18% VAT. If the cost of production by Athi Cement Ltd. […]

What are the rules governing the payment of VAT? Specify the additional tax that may arise from failure to comply with those rules.

The objectivity of the external auditor may be threatened or appear to be threatened where: (i) There is undue dependence on any audit client or group of clients; (ii) The firm, its partners or staff have any financial interest in an audit client; (iii) There are family or other close […]

i) Distinguish between a direct and indirect tax. (ii) Is Value Added Tax (VAT) a direct or indirect tax? Explain

Audit sampling is a technique for drawing conclusions about the characteristics of a population by testing a sample drawn there from. Internal and external auditors use it for both tests of controls, and substantive testing. Required: Describe the following: (i) Judgement sampling and statistical sampling; (ii) A representative sample; (iii) […]

What is the principle of cost sharing and to what extent does it influence the level of taxation? Discuss