F8 Audit and Assurance December 2009 Exam Tips

I WILL SUCCEED!



F8 : Audit and Assurance

Lecturer : Marcus Ong

Disclaimer of liabilities: While its advantageous to focus on high risk questions i.e. its likelihood that its examined in the coming exam, but a total reliance on them is detrimental to users' mental and emotional health. Discretion is required!

To my students of F8,

We came a long way, with many tutorials, questions and exam techniques discusse. Remember, you have to know the concepts and understand what part of the systems (namely sales/ purchases/ stocks/ cash/ wages) are being tested.

The following target questions are for your further practice and focus on likely exam questions. It prepares you mentally with a ‘draft answer’. In that at least 50% of the exam answer is prepared while you focus on using case study facts to integrate in your answer.

The target questions are actually covered in my questions bank, lecture notes, revision kit with you. Discuss with your class mates if you must.

Do Your Best,
Marcus



TARGET QUESTIONS
Question 1
a) Explain the substantive tests on assets existence and valuation and state the reasons for the audit procedures. (12 marks)
b) The control weaknesses and how the audit procedures be done to ascertain the purchases processes. Recommend improvements to the management. (8 marks)
c) What are the advantages of an audit planning? You may refer to ISA 315 as a guide. (6 marks)
d) How can audit sampling be selected? State 3 methods. (4 marks)

Question 2
a) What are the main changes in ISA330 - The Auditor’s Responses to Assessed Risks. (4 marks)
b) How can analytical procedures be used to enhance audit interpretations in purchases system? (3 marks)
c) What actions incoming auditors can take when to protect their integrity in face of Board’s intention to appoint and replace the outgoing auditors? (3 marks)

Question 3
a) On risk assessment, explain the unusual changes in the Income statement. (6 marks) [refer to June 2008 Question 3 (a)]
b) What are the main duties of internal audit and audit committee roles pertaining to risk assessments? (6 marks)
c) Explain the procedures for debtors circularisation. (4 marks)
d) Discuss the effectiveness of internal control procedures in a small business entity. (4 marks)

Question 4
a) Explain what factors to consider to justify the outsourcing of internal audit department. (6 marks)
b) Evaluate and recommend improvements on current Corporate Governance system. (5 Marks)
c) What are the necessary steps to confirm the valuation of Non Current Assets? (5 marks)
d) Identify and explain the weaknesses perpetual inventory controls system. (4 marks)

Question 5
a) Adjusting and non-adjusting events (6 marks)
b) Auditors responsibilities and audit work needed following the post audit events (5 Marks)
c) Different types of Auditors’ Report and its effectiveness toward shareholders-members modified report (5 marks)
d) What assurances work be done to determine if company is a going concern status? (4 marks)

Other critical topics
 Going concern – audit procedures that involves the future prospects of company
 Audit sampling
 Cut off tests for revenues and purchasing recognition
 Analytical procedures embedded in Substantive tests
 Fraud and negligence – External Auditors’ responsibilities
 Not for profit organizations – completeness, accuracy, cut-off tests on income/donations -and expenditures.
 Adequacy of internal controls
 Small businesses – poor internal controls highlighted