UC Limited specializes in selling small electrical appliances. A considerable portion of the company’s sales is on instalment basis. Although most of the company’s customers make their instalment payments on time, a certain percentage of their accounts are always overdue and some are never paid at all. The company’s experience […]

Explain the way in which the auditor should approach and perform his work in order to meet these responsibilities.

(a) What is meant by the term „fraud‟? Give four examples of fraudulent activities. (6 marks) (b) What do you consider to be the auditor‟s responsibilities in the course of the normal annual audit in relation to the detection of fraud? (6 marks)

Define the following terms: (i) Stochastic process: (2 marks) (ii) Transition matrix; (2 marks) (iii) Recurrent state; (2 marks) (iv) Steady state. (2 marks)

Restmount Kenya Ltd. was formed on 1 October 1997 in order to export tea and coffee to European markets. The Directors are unsure as to their responsibilities and the nature of their relationship with the external auditors. The audit partner has asked you to visit the client and explain to […]

Emali Co. Ltd. has undergone a period of substantial growth following its establishment five years ago. At the last annual general meeting Smith & Co. Associates, a tow-partner firm of Certified Public Accountants were re-appointed as auditors. However, Smith & Co. Associates have decided that they do not have the […]

The following plot shows the current account balance (as a percent of GDP) for the five BRICS economies (Brazil, Russia, India, China and South Africa) from the first quarter of 2003 to the second quarter of 2019:       Discuss the trend of the current account balance (as a […]

The auditing guideline on ‘recording’ requires audit working papers to be sufficient complete and detailed so that an experienced auditor who has no previous connection with the audit is able to subsequently ascertain from working papers the work performed and to further support the conclusions reached thereon. Required: (a) State […]

You are the audit manager in charge of Car Alarms Ltd. Whose financial year ended on 31 March 1993. Due to the tight schedule of your programmes you are unable to devote anytime at the client‟s premises. Therefore you have delegated the responsibility to the audit senior. (a) State the […]