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What is the difference between audit and compliance?

Audit is an independent examination of business financial statements so as to issue opinion on whether the financial statement are prepared in accordance with acceptable financial reporting framework and show true performance and position of the business. Audit is conducted according to the requirements of countries laws and regulations and international standard on auditing. The auditor when conducting audit aim … Read the rest

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Revision question on internal control system (NBAA,B3,NOV 2018)

(a)       Define a ‘test of control’ and a ‘substantive procedure’.

(b)       Kibosho Happy Kitchens Co (KHK) is a kitchen cleaning company.  Customers’ kitchens are always cleaned monthly. After cleaning the kitchen, cleaner leaves an envelope containing invoice for payment which is posted through the customer’s front door.  KHK has a large number of receivable balances … Read the rest

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Audit and assurance revision question (NBAA, B3, NOV 2018)

(a)  Explain why is it important that an auditor should send a letter of engagement prior to undertaking an audit work.

(b)  Briefly describe the main contents of a letter of engagement.

(c)   Publicity  by  individual  professional  accountants  in  public  practice  in  non- advertising environment is  acceptable  under certain conditions as  provided for under the IFAC’s International Ethics Standards Board … Read the rest

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Revision question on IASB conceptual framework and qualities of financial information

The IASB’s conceptual framework for financial reporting states that the qualitative characteristics of financial statements are the attributes that make financial information useful.

Required: Explain the fundamental qualitative characteristic Relevance”.                               Read the rest

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ISA 560 revision question (NBAA, C2, NOV 2018)

(a) Briefly describe different models in which internal audit services could be delivered.

(b) MONO is a listed Construction Company based in the north of the country, whose activities encompass house building and development. Its annual revenue is TZS.550 million and profit before tax is TZS.70 million.

You are the audit senior involved with the audit of MONO for the … Read the rest

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Audit reporting revision question 2 (NBAA, C2,NOV 2018)

You are the audit manager for three clients of your audit firm and you are reviewing audit files and draft audit reports submitted by your subordinates on your request. Extracts of the proposed audit opinions for the three clients are as given below:

Tegeta Ltd

Consistent losses that the company has been incurring for the … Read the rest