Pakistan Institute of Public Winter Exam-2021

Finance Accountants [05.Nov.2021] [03:30 – 06:15 pm]

Additional time – 15 min for Paper Reading

Audit & Assurance (PS)

CGA | PMAD | PRAD
Marks-80 Subjective Duration: 02 Hours 30 Minutes
[Instructions]
 Ensure that the question paper delivered to you is the same, in which you intend to appear.
 Read the instructions given on the title page of Answer Script.
 Books are not allowed
 Start each question from fresh page.

Attempt FIVE questions including Q. No. 7 which is compulsory.

Q.1 The Auditor performs following analytical procedures during audit. You are required to 15
briefly explain the following analytical procedures and mention the guidelines given by FAM.
 The level of assurances that can be derived in percentage terms.
 The level of resulting risk the auditor faces in percentage terms.
(a) General Reviews for Reasonableness
(b) Comparative Analysis
(c) Exploratory Analysis
(d) Predictive Analysis
(e) Statistical Analysis

Q.2 (a) What describes Limitation of Audit Scope? 03

(b) Highlight situations and circumstances in public sector that may give rise to Limitation 12
of Scope?

Q.3 (a) The Auditor needs to have and develop ability to identify risks which requires an 06
understanding of what constitutes risk. You are required to list the steps to follow in
order to Identify Risk.
(b) Highlight the areas that Regularity Audit embraces as per FAM. 05
(c) Write a brief note on Performance Audit. 04

Q.4 (a) You are in-charge of a Field Audit team, assigned a role to conduct certification audit of 08
ABC Department. One of the responsible officers of the department tries to bribe,
threat or intimidate one of your team members which is against the Code of Ethics of
the DAGP. What steps should be taken to avoid or mitigate the implications of such
threat or intimidation.

Contd…..
 (2)

(b) What is the purpose of developing a Financial Audit Manual by DAGP and also mention 07
the Legislative basis of the Authority of DAGP to conduct Audits

Q.5 You are an Audit Officer in DAGP. A newly appointed Senior Auditor is confused about 15
various categories of Internal Control. You have been asked by Director Audit to clear his
understanding about the following internal controls:
(a) Input vs. Output
(b) Independent vs. Interrelated
(c) Manual vs. Electronic
(d) General vs. Application
(e) Documented vs. Undocumented
(f) Preventive vs. Detective
(g) Compensating

Q.6 (a) What are the minimum Terms of Engagement to be included by the auditor in an Entity 05
Communication Letter?
(b) Prepare an Internal Control Questionnaire for the payroll expenditure. 10

Q.7 You are conducting Financial Attest audit. During the course of Audit, you noted the
following errors in the Account heads.

S. No Account Head Book value Audit value Error

1. Travel & Transportation 4,547,450 4,212,365 335,085
2. Conferences 85,000 - 85,000
3. Printing & Publications 1,236,213 101,235 1,134,978
4. Rent and Taxes 2,345,414 1,612,345 733,069
5. Utilities 3,465,342 3,238,213 227,129
6. Medical Charges 735,000 - 735,000
7. Communication 87,564 - 87,564
8. Repair & Maintenance 6,576,512 4,512,345 2,064,167

The following information is available with respect to population;

Population Value 556,350,000 Materiality 5,563,500

Population Size 780 Planned Precision 4,450,800
Sample Size 525 Expected Aggregate Error 1,112,700
Error Free Vouchers 517 Confidence Level 95%

70% or
75% 80% 85% CONFIDENCE LEVEL 90% 95% 97.5% 99%
less
BASIC PRECISION
1.21 1.39 1.61 1.90 2.30 3.00 3.69 4.61
FACTORS
0.24 0.31 0.39 0.48 PGW FACTORS 0.59 0.75 0.88 1.03

Contd…..
 (3)

Required:
Calculate:
(i) Materiality 02
(ii) Expected Aggregate Error 01
(iii) Known Error 01
(iv) Most Likely Error 08
(v) Basic Precision 05
(vi) Precision Gap Widening 03

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