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OCT2019 Ans - Answer
Auditing (AUD339)
Universiti Teknologi MARA
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AUD
OCT
QUESTION 1
a. i. Independent Examination means investigation using audit process and carrying out tests to accumulate self-generated evidence which are independent from management before arriving at the conclusion on which the audit opinion is based.
ii. Appointed Auditor in accordance to Section 8 of Companies Act 1965 is an approved company auditor firm ranges from sole proprietorships to partnership providing broad categories of services to the company.
b. Three functions of MIA are: i. To determine the qualifications of persons for admission as members ii. To provide for the training and education by the Institute or any other body, of persons practising or intending to practice the profession of accountancy iii. To approve the MIA Qualifying Examination(QE) and to regulate and supervise the conduct of that Examination
c. Two regulatory requirements that helps regulate auditing process and profession in Malaysia are: i. Complete at least 120 hours of relevant CPD activity in each rolling three year period of which 60 hours are verifiable ii. Complete at least 20 hours of the 120 hours required in (i).
d. Three factors lead to demand in auditing are: i. Need for protection of absentee owner ii. Credibility gap iii. Need for assurance as to reliability of financial report
e. Three responsibilities of management are: i. Preparing the yearly financial statement ii. Develop and maintain adequate accounting records and internal control system iii. Safeguarding of company’s assets.
QUESTION 2
a. Three reasons for auditor to provide reasonable assurance are: i. Audit evidence resulted from testing a sample of population ii. Accounting presentation contain complex estimates iii. Fraudulent are often difficult to detect
b. Information asymmetry occur due to the fact that conflict of interest happened between two parties that involved. The principal also not able to observe the agent at any time or it also can happen when the agen observed everything but the principal did not.
c.
Characteristics Internal Auditor External Auditor Independence Employee of the company Independent from the company Appointment Appointed by the company Appointed by the shareholders during AGM
d. Two situations that may involve forensic audit are: i. Detection of fraud in the financial statement ii. Misuse of company’s asset by the employer or employee
e. i. Compliance Audit ii Operational Audit iii Forensic Audit iv Compliance Audit
QUESTION 3
A.
a. Two situations whether the auditor can be disqualified are: i. If he/she is indebted the company amounting RM25,000 and above ii. If he/she is and officer of the company
b. Two conditions for appointment of an approved company in S271 for a public company are: i. The company can appoint auditor at any time before the 1st AGM ii. The appointment is to fill the casual vacancy in the office of the auditor
OCT2019 Ans - Answer
Course: Auditing (AUD339)
University: Universiti Teknologi MARA
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