🇳🇬 PATRIOT ODUNARO BABATUNDE JIMOH
42 TUTORIAL QUESTIONS on
acc 213-auditing 1
(CONTACT PATRIOT FOR SOLUTIONS ON 08038454008)
42 TUTORIAL QUESTIONS ON ACC 213-AUDITING 1
TOPIC 1: THEORY AND PHILOSOPHY OF AUDITING.
1. Explain in detail the Theory of Auditing, highlighting at least four theories.
2. Discuss the philosophy of auditing and its major components
3. State and explain five importance of auditing.
4. What is auditor independence? Explain three types of independence.
5. Explain any four limitations of auditing.
6. Discuss the key qualities of an auditor.
TOPIC 2: RIGHTS, DUTIES AND RESPONSIBILITIES OF AUDITOR.
7. Define an auditor and state five rights of an auditor.
8. Mention five duties and responsibilities of an auditor.
9. Distinguish between the duties and responsibilities of an auditor.
10. Explain the responsibilities of an auditor under negligence.
11.Sogbae Nigeria Limited’s total assets amount to N43,500,000. The auditor applies a materiality level of 5%.
An auditor charges N7,250 per hour and spent 126 hours on an audit assignment.
Required:
(a) Calculate the materiality amount.
(b) Calculate the audit fee.
12. Explain five responsibilities of an auditor.
13.Explain five duties of an auditor and state five rights of an auditor.
14. An auditor was found negligent in detecting an error amounting to ₦800,000. The court ruled that the auditor should bear 30% of the loss.
An audit firm bills ₦120,000 as audit fee and allows a discount of 10% to the client.
(a) Calculate the auditor’s liability
(b) Calculate the net audit fee payable
TOPIC 3: PROFESSIONAL ETHICS.
15. Access
Bank Plc employee accepts a gift from a customer in exchange for approving a
loan.
(a) Identify ten ethical principle violated.
(b) State ten possible consequences.
16. Ninalowo Nigeria Limited recorded 65 ethical violation cases in 2023 and 10 cases in 2025 after ethical training. Calculate the percentage reduction in unethical behaviour.
17. Kogbagidi Nigeria Limited has 300 employees. 240 employees comply with the organisation’s code of ethics.
A professional body imposes a fine of N15,000 for each ethical violation. A member committed 8 violations.
Required:
(a) Calculate the ethical compliance rate.
(b) Calculate the total fine payable.
18. Outline five factors that can lead to unethical behaviour among professionals.
19. Discuss the importance of professional ethics in an organisation
TOPIC 4: THE AUDITORS LIABILITIES.
20. Explain four circumstances under which an auditor may be held liable.
21. Distinguish between civil and criminal liability of an auditor
22. State five types of auditor’s liability.
23. The total loss suffered by investors was ₦900,000. The auditor was ordered to compensate the investors equally.
Required: Calculate the amount payable to each of the three investors.
24. An auditor was paid an audit fee of ₦300,000 but later found liable for damages of ₦1,100,000.
Calculate the net financial effect on the auditor.
25. Alajeju Nigeria Limited suffered a loss of ₦2,000,000 due to an auditor’s negligence. The court ruled that the auditor should bear 40% of the loss.
Calculate the auditor’s liability
TOPIC 5: THE APPOINTMENT AND REMOVAL OF AUDITORS
26. Explain five reasons why shareholders may remove an auditor
27. Distinguish between the appointment of the first auditor and subsequent auditors.
28. Sharing Audit Fee between old and new Auditors given as:
Annual audit fee: ₦600,000
Old auditor: 9 months
New auditor: 3 months
29. Explain five rights of an auditor upon removal.
30. Explain four qualifications required for appointment as an auditor.
31. Oniduro Nigeria Limited’s annual audit fee is ₦720,000. Auditor resigns after 7 months. Calculate the audit fee payable.
TOPIC 6: THE INTER-RELATIONSHIP OF THE AUDIT FUNCTIONS AND THE
INTERNAL CONTROL SYSTEM.
32. Distinguish between internal audit and external audit by bringing out ten factor in tabular form.
33. An audit firm planned 100 audit hours. Due to strong internal control, audit hours reduced by 35%.
Calculate the actual audit hours.
34. Explain five ways in which internal control supports the audit function.
35. State and explain five limitations of internal control systems.
36. Audit fee per hour is 44,500.
Audit
hours before control improvement = 90
hours.
Audit hours after control improvement = 60
hours.
Required:
Calculate:
(a) Audit cost before improvement
(b) Audit cost after improvement
(c) Amount saved
TOPIC 7: SELECTIONS OF AREAS OF WORK CONTROL, IN-DEPTH TESTS USE
OF GRAPHING AND OF SAMPLING TECHNIQUES.
37. An auditor planned to test 1,100 invoices, but due to strong internal control, only 650 invoices were tested.
Required:
(a) Calculate the reduction in sample size.
(b) Calculate the percentage reduction.
38. State and explain five advantages of audit sampling.
39. Audit fee per hour is N9,500.
Audit
hours before control improvement = 90
hours.
Audit hours after control improvement = 60
hours.
Required:
Calculate:
(a) Audit cost before improvement
(b) Audit cost after improvement
(c) Amount saved
40. Distinguish between in-depth tests
and routine audit tests.
41. Monthly sales figures (N’000) of a are:
January 600
February 900
March 1,200
April 750
Required:
(a) Calculate the increase in sales from February to March.
(b) Calculate the percentage increase.
(c) Calculate the decrease in sales from March to
April.
(d) Calculate the percentage decrease between March and April.
42. Explain five reasons why auditors select specific areas of work for detailed examination.
