Benazir Bhutto Shaheed University

Lyari Karachi
BBA 11th batch 4th Semester Section (A)

Name: Naveed Khokhar

Reg No: B2011078
Paper: Auditing And Taxation
Instructor: Mam Anila Devi
Final Paper (Online)
Question No: 1
Answer
Materiality is a concept or practice of auditing and accounting regarding the materiality.
Materiality of amounts transactions or variances.
Here is a list of all materiality benchmarks .
 Total income
 Total assets
 Net income before tax
 Total spending

Question No: 2
Answer
As an supervisor audit earlier than the auditor can finish whether or not the monetary
statements are freed from cloth misstatement or misrepresentation the auditor ought to
persuade himself that there enough prove to guide his conclusion. Sufficient proof Is
from time cited herein as enough and suitable proof therefore audit files are
Essential to the fulfillment of the audit work.

Question No: 5
Answer
NEGATIVE CONFIRMATIONS
Negative confirmations provide less persuasive audit evidence than positive
confirmations. Accordingly,
the auditor shall not use negative confirmation requests as the sole substantive audit
procedure to
address an assessed risk of material misstatement at the assertion level unless all of the
following are
present:
(a) The auditor has assessed the risk of material misstatement as low and has obtained
sufficient
appropriate audit evidence regarding the operating effectiveness of controls relevant to
the
assertion;
(b) The population of items subject to negative confirmation procedures comprises a
large
number of small, homogeneous account balances, transactions or conditions;
(c) A very low exception rate is expected; and
(d) The auditor is not aware of circumstances or conditions that would cause recipients of
negative confirmation requests to disregard such requests.

Question No:3
Answer
1: Consultation:
The engagement leader shall: Responsible for the engagement team to properly consult
on
difficult or controversial issues. Ensure that members of the engagement team have
carried out
appropriate consultations during the engagement, both within the engagement team and
between
the engagement team and others at an appropriate level within or outside the 'business. Be
assured that the nature, scope and conclusions resulting from the consultations have been
agreed
with the parties consulted; and determine that the conclusions resulting from these
consultations
have been exercised.
2: Engagement Team:
The engagement partner must be satisfied that the engagement team (auditor’s experts
who are
not part of the engagement team) collectively possess the skills and abilities appropriate
to:
Perform audit engagements in accordance with Professional Standard and applicable
legal and
regulatory requirements; and Permit issuance of the auditor's report as appropriate.
3: Quality Control:
Response: For audits of a listed entity's financial statements and for other audit
engagements, if
any, for which the entity has determined that a quality control review engagement is
required, the
engagement partner must: Determine that a engagement quality control auditor has been
appointed.
● Discuss significant matters arising during the audit engagement, including those
identified
during the engagement quality control review, with the engagement quality control
reviewer; and
● Not date the auditor`s report until the completion of the engagement quality control
review.
The engagement quality control reviewer shall perform an objective evaluation of the
significant
judgments made by the engagement team, and the conclusions reached in formulating the
auditor`s report. This evaluation shall involve:

● Discussion of significant matters with the engagement partner.

● Review of the financial statements and the proposed auditor`s report.
● Review of selected audit documentation relating to the significant judgments the
engagement
team made and the conclusions it reached; and
● Evaluation of the conclusions reached in formulating the auditor`s report and
consideration of
whether the proposed auditor`s report is appropriate.

Question No: 6
Answer
The audit engagement letter is sent at the beginning of the audit process to avoid
Misunderstandings regarding the audit process. Letter of order is created to document and
confirm auditor appointment with subsequent auditor approval.

Question No: