Auditing November 2012 Past Paper – KNEC Diploma

Auditing November 2012 Past Examination Question Paper

This Past Paper examination was examined by the Kenya National Examination Council (KNEC) and it applies to the following Certificate courses

• Diploma in Accountancy

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Name_________________________________ Index No.___________________ _________________________ /.
2804/304
Candidate’s Signature_________
AUDITING
November 2012
Date________________________
Time: 3 hours

THE KENYA NATIONAL EXAMINATIONS COUNCIL
DIPLOMA IN ACCOUNTANCY
AUDITING
3 hours

INSTRUCTIONS TO CANDIDATES
Write your name and index number in the spaces provided above.
Sign and write the date of the examination in the spaces provided above. This paper consists of SIX questions.
Answer any FIVE questions in the spaces provided in this question paper. All questions carry equal marks.

This paper consists of 16 printed pages.
Candidates should check the question paper to ascertain that all the
pages are printed as indicated and that no questions are missing.

1. (a) Elgo Associates have been appointed to audit the accounts of Longo Limited.
Explain six steps that the firm should consider before accepting the appointment. (12 marks)
(b) Highlight four differences between a statutory audit and a private audit. (8 marks)

2. (a) Explain six ways in which an audit firm may overcome the threats of independence.                          (12 marks)
(b) Prepare an internal control questionnaire that would assure the auditor that control objectives over fixed assets have been achieved.                   (8 marks)

3. (a) Explain six circumstances under which an auditor may seek evidence from third                  (12 marks)
(b) Prepare an audit programme for bank reconciliation.              (8 marks)

4. (a) Explain five ways in which an external auditor may benefit from relying on the work of the internal auditor.                               (10 marks)
(b) Explain five advantages of using computer assisted audit techniques (CAATs)during auditing.                           (10 marks)

5. (a) Outline the elements of an unqualified audit report.                 (12 marks)
(b) Explain four factors that might influence the analytical review procedures conducted by an auditor.                          (8 marks)

6. (a) Highlight six advantages of statistical sampling. (12     marks)
(b) Stock and work-in-progress forms a significant proportion of the current assets.
Enumerate the audit procedures that an auditor should carry out before the stock take. (8 marks)