Important Theory Questions From Past Papers

1- Explain the difference between an interim and a final audit. (5 marks) June2014
2- Define the ‘three Es’ of a value for money audit. (3 marks) June 2014
3- Describe FOUR benefits of documenting audit work. (4 marks) June 2014
4- Define what is meant by ‘audit sampling’ and explain the need for this. (3 marks) June 2014
5- Explain the safeguards which your firm should implement to ensure that this conflict of
interest is properly managed. (4 marks) June 2014, Sep-Dec 2017
6- Describe auditor’s responsibilities in relation to the prevention and detection of fraud
and error. June 2015, Mar-June 2018, Sep-Dec 2019 (4 marks)
7- Describe the process Audit firm should have undertaken to assess whether PRECONDITIONS
for an audit were present when accepting the audit of Client. (3 marks). Sep-Dec 2017
8- Identify THREE main areas, other than audit risks, which should be included within the audit
strategy document for Prancer Construction Co, and for each area provide an example
relevant to the audit. (3 marks) Sep-Dec 2017
9- Define audit risk and the components of audit risk. (4 marks) June 2016, Mar-June 2017
10- - Identify what a key audit matter (KAM) is and explain how the auditor determines and
communicates KAM. (5 marks) Mar-June 2017
11- Describe FOUR different types of control activities and, for each type, provide an example
control a company may implement. (4 marks) Mar-June 2017
12- Explain why analytical procedures are used during THREE stages of an audit. (3 marks) Sep-
Dec 2018
13- Describe TWO methods for documenting the sales system, and for each explain ONE
advantage and ONE disadvantage of using this method. (6 marks) Sep 2016, Mar-June 2019
14- Explain the benefits of audit planning. (4 marks) Dec 2014, Sep 2016
15- In line with ISA 220 Quality Control for an Audit of Financial Statements, describe the audit
supervisor’s responsibilities in relation to supervising and reviewing the audit assistants’
work during the audit. (4 marks) – Sep 2016
16- Describe FIVE types of procedures for obtaining audit evidence. (5 marks) Sep 2016
17- Explain the five elements of an assurance engagement. (5 marks) June 2016
18- Identify and briefly explain the FIVE components of an entity’s internal control. (5 marks)
June 2015
19- Explain the purpose of review engagements and how these differ from external audits; and
Describe the level of assurance provided by external audits and review engagements. (4 marks)
June 2015
20- Identify and explain FOUR financial statement assertions relevant to classes of transactions
and events for the year under audit. (4 marks) June 2015
21- Describe FOUR elements of an unmodified auditor’s report and for each explain why they
are included. (4 marks) Dec 2014
22- Explain the factors Auditor should consider when placing reliance on the work of the
independent valuer. (5 marks) Dec 2014
23- Identify and explain TWO factors which would indicate that an engagement letter for an
existing audit client should be revised. (2 marks) Sep Dec 2015
24- 24- Explain the Purpose of An audit Engagement Letter. (2 marks) March 2020

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Important Theory Questions From Past Papers
25- List SIX matters to be included within an audit engagement letter . (3 marks) Sep-Dec
2015, March 2020
26- Identify FIVE sources of information relevant to gaining an understanding of ENTITY and
describe how this information will be used by the auditor. (5 marks) Sep-Dec 2015
27- - Explain FOUR factors which influence the reliability of audit evidence. (4 marks) Sep-Dec
28- List Four Control Objectives of Sales and Dispatch System. (4 marks) Sep-Dec 2019
29- Write a Covering Letter in respect of the Sales and Dispatch System. (2 marks) Sep-Dec
2019, Dec 2014
30- Define and explain materiality and performance materiality. (4 marks) Mar-June 2019
31- Explain why it is important for auditors to communicate throughout the audit with those
charged with governance; and Identify TWO examples of matters which the auditor may
communicate to those charged with governance. (4 marks)
32- Describe four matters the auditor may consider in determining whether a deficiency in
Internal Controls is significant. (4 marks) March 2020

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