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
the directors, the fundamental aspects of the accountability of the directors
and their relationship with the auditor.
Required:
Explain to the directors of Restmount Kenya Ltd: –
a) The need for an audit.
(6 marks)

b) Procedures for the appointment of an auditor of a public company
under the Companies Act.
(5 marks)
c) Directors‟ responsibilities in relation to the accounting function of the
Company.

(4 marks)
d) Auditors‟ statutory responsibilities in relation to the audit of the
company‟s financial statements.
(5 marks)