Problem:
Part A:
Government has recently set up a parastatal body accountable for the management of land in Mauritius. The management is unsure as to the need for audit. The Director of Audit, the auditor of the body, has asked you to visit the client and describe to management the more fundamental aspects of the accountability of body.
Required:
Question1. Describe to management what an audit is.
Question2. In brief explain the following kinds of audit
i) Performance audit
ii) Management audit
iii) Internal audit
Question3. Describe how management audit diverges from financial audit.
Question4. Statutory audits are audits performed because the laws require them. State all five benefits of statutory audit.
Part B:
Question1. The conduct of auditors must be beyond reproach at all times and in all circumstances. In brief describe the four principles that auditors must apply and uphold.
Question2. Describe how the objectivity of the external auditor may be threatened or appear to be threatened if the firm, its partners or staff have any financial interest in audit client.