Explain the following terms: (a) Materiality; (4 marks) (b) The duty of confidentiality; (5 marks) (c) Professional indemnity insurance; (3 marks) (d) Peer review; (3 marks) (e) Quality Control. (5 marks)

With reference to Income Tax, write short notes on the following: (a) Self assessment; ( 4 marks) (b) Notice of Objection; ( 4 marks) (c) NSSF; ( 4 marks) (d) PIN advantages; ( 4 marks) (e) Valuation of housing for employees. ( 4 marks)

Write short notes on Market Equilibrium. (6 marks) b) Using the following demand and supply functions of a commodity x, compute the equilibrium price and quantity. Qd = 100 – 2P Qs = 40 + 4P (4 marks) c) Ceteris paribus, use diagrams to illustrate and explain the effects on […]

Kenwide Enterprises Ltd. is a distributor of wines and spirits. The profit and loss account for the year ended 31 December 2005 is as follows: Sh. Sh. Purchases Staff wages Rent and rates Distribution and office expenses Traveling Repairs and maintenance Discount Bad debts Subscription Bank charges & interest 1,000,000 […]

State briefly whether the following pairs of events are independent, and why. (i) Being an accountant and having large feet. (2 marks) (ii) Earning a large salary and paying a large amount of income tax. (2 marks) (iii) Being drunk while driving and having an accident. (2 marks) (iv) Any […]

i) Why should the auditor be unwilling to take full responsibility for the detection of fraud during the annual audit? Explain. (5 marks) ii) Discuss the proposition that the „expectations gap‟ has arisen because of the public‟s ignorance and should therefore be resolved by the public themselves. (5 marks)

The table below shows the income per month of borrowers and the percentage of all mortgages as provided by Building Society Mortgages in the year 2000. Income per month of borrowers (Sh.) Percentage of all mortgages Under 30,000 30,000 35,000 40,000 45,000 50,000 – – – – – 34,999 35,999 […]

a) Do you believe that the auditors should be responsible to users other than the shareholders? Give reasons to support your answer. (5 marks) b) Does the auditor require a codified definition of “reasonable care and skill” or should this be left to professional judgment? Explain. (5 marks)

Two machines, A and B are used to process certain items. The cost function for each machine is given by: Machine A: Y = 15 + 3X Machine B: Y = 18 – X + X2 Where: Y is the cost of producing X items (Sh. ‘000’) X is the […]