The auditor‟s operational standard states, “The auditor should obtain relevant and reliable audit evidence sufficient to enable him to draw reasonable conclusions thereon”. Required: a) What factors would influence the judgment of the auditor with regard to sufficiency of audit evidence? (10 marks) b) What factors would influence the auditor […]

Explain the purpose of selecting participants from different functional fields to participate in a Delphi Study. Could this strategy backfire?

A firm operating in a perfectly competitive market has to sell all its output at the price of Sh.10 per unit. Its marginal cost function is given by Q + 4 and the total fixed cost is 1. Determine: d) The profit maximizing output level. (10 marks) e) The level […]

A monopoly firm is faced with the following demand function P = 13 – 0.5Q The Marginal Cost function for the firm is given by 3 + 4Q and the total fixed cost is 4. Determine: a) The profit maximizing output. (8 marks) b) The level of supernormal profit if […]

(i) Explain why a firm in perfect competition may continue in the production of goods which it can only sell at a loss and why it cannot continue doing this indefinitely. (10 marks) (ii) Illustrate and explain the short-run supply curve of a firm in perfect competition (10 marks)

K, N and M have been trading in partnership as Meka Associates making water tanks for the last 5 years. They share profits and losses in the ratio 2:2:1 respectively. For the year ended 31 December 2005, Meka Associates made a profit adjusted for income tax purposes of Sh.60,498,500 before […]

Professor Ujuzi, a Kenyan, came back to Kenya from USA on 1 August 2005 to take up an appointment as a managing director of Good Metal Limited after a 15 year absence from Kenya. The letter of offer sent to him from the Good Metal Limited indicated that he would: […]

Outline the basic elements of an unqualified audit report

List and discuss the principal matters, which the auditors considers in forming an opinion on the financial statements.