AUDITING (Professional Level-III)

Introduction:
1. What is Auditing? What are objectives (Primary and Secondary), functions, advantages, feature
and scope of an audit? (ISA-1, KAS)
2. As an Auditor if you found, scope is limited, what will happen?
3. What are the basic differences exists in the audit report of Financial Audit, Internal Audit, and
Management Audit? (Sheet)
4. Discuss the practical limitations involved with regard to the application of IAS and ISA in
Bangladesh.
5. Discuss the importance and status of the guidelines issued by the International Federation of
Accountants (IFAC) on professional ethics for public accountants in Bangladesh.
6. Write short note:
a) Statutory and Non-statutory audit, (Sheet)
b) Internal and External Audit, (Sheet)
c) Interim and Final Audit, (Sheet)
d) Complete (Final) Audit, (Sheet)
e) Assurance Engagement. (Sheet)
f) Going Concern, (Sheet)
Legal Status and Position of an Auditor
a) Discuss the provision of the Company Act. 94 regarding: Auditors;
1. Appointment and Remuneration,
2. Right and Powers,
3. Duties and Responsibilities,
4. Qualification and Disqualification,
5. Resignation and Removal.
b) Do the auditor have any responsibility as per provision of the Companies Act for detection of error?
c) What are rights and duties prescribed in the companies act for auditor regarding attending the Annual
General Meeting (AGM)
Basic Principles Governing an Audit-ISA 200.
1. What are the Basic Principles Governing an Audit?
2. What are the General Principles Governing an Audit?
3. “A professional accountants responsibility is not exclusively to satisfy the needs of an individual
client or employer. The standards of the accountancy profession are heavily determined by the
public interest” Explain.
4. Explain four factors that contribute to the need for Financial Statement Audits? Explain the
economic benefits of a Financial Statement Audit. Describe the limitation of a Financial
Statement Audit.
5. What is meant by auditor’s independence? Describe how it is secured and strengthened by status
and professional ethics. (Sheet)
6. What are the weaknesses of Auditors Independence in our country? (Sheet)
7. “The auditor should be independent in fact and appearance” Discuss.
8. What are the three specific aspects of Independence that an auditor should carefully guard in the
course of a financial statement audit? (Technical, Investigative & Reporting) (Robertson-57)
9. Would a chartered Accountant be considered independent for an audit of the financial statements
of a club for which he is serving as a treasurer without compensation? Explain.
10. The maintenance of audit independence’ is vital to the ‘credibility of the audit’ in the minds of
the users of financial statements. In the light of this statement, you are required to:
ii) explain the concept of audit independence.
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 iii) state the provisions of the companies Act, 1994 which strengthen audit independence.
iv) State four other considerations which may safeguard audit independence in Bangladesh.
11. Short note:
a) Audit risk and Materiality, (Sheet)
b) Reasonable assurance, (Sheet) (Robertson-200)
c) True and Fair View, (Sheet)
d) Ethical and Technical standards, (Sheet)
e) Substance over form, (Sheet)
f) Materiality, (Sheet)
g) Profession
h) Consistency Principle
i) Walk through test,
Audit Planning& Control:
1. What is letter of Engagement and what are the steps to be followed for Audit Engagement?
(Sheet) BSA
2. Draft an Engagement letter to the management of a pioneer company. (ISA-2)
3. What are the main steps to be followed for the issuance of letter of engagement against a retiring
auditor? Explain with example.
4. The standard of due professional care to accepting an audit engagement. Do you agree? If not
explain
5. What is Audit planning and what procedure does an auditor use to obtain the information for
Audit planning? What are the stages of audit planning? (Sheet)
6. What three elements of planning and supervision are considered essential in audit practice?
(Robertson-54)
7. What is meant by the terms nature, timing and extent of audit procedures? (Robertson)
8. What is audit program and should it be prepared? Draft an audit program of a company engaged
in manufacturing of pharmaceutical product?
9. What is audit program and what are the advantages and disadvantages of audit program.
10. “The framing of an audit program may be affected by the degree of internal control which is in
operation” Explain.
11. Briefly discuss the audit program for Note Payable, Long Term Debt and Owners Equity
12. What steps would you take before commencing the actual work of audit upon being appointed as
auditor?
13. What is an Audit Note Book? What is your opinion as to the value of an Audit Note Book?
14. XYZ ltd, is a medium sized business involved in manufacturing and assembling consumer
electronic products. It is privately owned. Its minority shareholders requested that the annual
financial statement be audited for the first time this year. As an auditor your reviewed the
following heads of accounts in the Trial Balance. (Robertson-164)
Cash, Inventory (Finished goods, work in process, unassembled components, spare parts)
Property Plant & equipment, Differed Development Cost, Goodwill, Account payable, Long
Term Loan, Revenue, Retained earnings.
Required:
(a) Evaluate the inherent risk for each of the above accounts. Give the reasons that support your
assessment and state any assumptions you need to make.
(b) For each account describes the procedure you would use to assess the control risk.
15. What is working paper? Describe the procedure for preparation of working papers? What
information do the working papers include?
16. What are the objectives of working paper?
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 17. Who is the owner of the working paper? Are the working papers a substitute for the auditors
accounting records?
Audit Techniques
1. What is internal control? How would you evaluate the internal control and accounting system?
2. How do you install internal control system in the organization? What are the internal control
techniques?
3. Difference between internal control and internal check.
4. “The extent and efficiency of internal controls determine the scope of the auditors work” Explain
the statement.
5. Describe the significance of an adequate and effective system of internal control for the auditors?
6. As an auditor, what type of controls would you expect to have for: Bank Reconciliation, Trade
Debtors, and Inventories.
7. What do you understand by substantive and compliance test?
8. Discuss different types of controls with example.
9. What are two methods of projecting the knows misstatement to the population in audit sampling?
(Robertson-243)
10. What are three basic steps in quantitative evaluation of monetary amount evidence when auditing
an account balance? (Robertson-243)
11. What additional considerations are in order when auditor’s plan to audit account balances at an
interim date several weeks or months, before the clients’ fiscal year-end-date. (Robertson-243)
12. “Vouching is the essence of audit”-Discuss briefly. (Sheet)
13. What is meant by “Vouching”, “Tracing” and “Scanning”? Give example of vouchers you would
refuse to accept although proper stamped and signed and the reasons of such refusal. (Robertson-
124)
14. Define distinguish between “Recalculation” and “Re-performance”?
15. What is the difference between Vouching and Verification?
16. How will you verify the following items appearing in the Balance Sheet of A. ltd.
a) Motor Vehicle; b) Land and Building; c) Goodwill; d) Contingent Liability; e) Cash in hand;
f) Bank Loan; g) Trade Debtors; h) Capital; i) Addition to fixed assets;
17. Short note:
a) Analytical review procedure, (BSA-520)
b) Practice Inspection, (BSA-500)
c) Observations, (Robertson-117)
d) Enquiry, (Robertson-119)
e) Third party confirmation, (Robertson-118)
f) Re-performance, (BSA-500)
g) Sampling technique, (BSA-530)
h) CAAT, (ISA-16)
i) Working papers,
j) Audit completion procedure,
k) Walk-through test,
l) Audit evidence, (BSA-500)
Audit Reports:
1. What is Audit Report? How are the basic elements or contents of the Auditors Report?
2. Discuss the different types of auditor’s opinion with example.
3. “An Auditor is expected to have an absolute basis for the expressions of an opinion” do you
agree?

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 4. What are the auditors responsibility regarding fraud and errors in an audit of financial statements
under ISA 240.
5. What are the different types of error may be found in the books of accounts? What are the
remedies can you suggest for such error? (KAS)
6. What treatment is given stock dividends and splits that occur after the balance sheet date but
before the audit report is issued? Explain.
7. What are the two types of subsequent events? In which way’s they are treated differently in the
financial statements? (BSA-560) (Robertson-515)
8. What are the different types of audit opinion may be formed while considering the following
events:
i. Non compliance of BRPD circular,
ii. Non compliance of the company Act.
iii. Non compliance of SEC Act. Rules and Regulation,
iv. Non compliance of BAS-7,
9. How this factors affecting the audit opinion:
a) Events occurring after the Balance sheet date,
b) Provisions and Contingencies,
c) Going concern,
d) Letter of representation or letter of weakness,
e) Management Letter,
f) Consideration of Local Laws and Regulations.

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