i) Explain the types of audit strategies and describe how auditors determine their audit strategy.(8 marks)

ii) Grand thorn is a successful accounting firm with a large range of clients across Zambia. During the year 2017, Grand thorn gained a new client, ACU University. The Year-end for ACU is 31 December. The audit partner for the audit of ACU, Sililo , has discovered that two months before the end of the financial year, one of the senior administration officers at ACU was dismissed. Her employment was terminated after it was discovered that he had worked in collusion with a number of students to reduce their fees. The officer would then take secret payments from the Students. The officer had access to the student database. While she was only supposed to update room-located changes for students,she was able to reduce the students period of stay and the value of other services provided. The fraud was detected by a fellow employee who overheard the officer discussing the scam with a student. The employee reported the matter to the Vice Chancellor.

Required:

a)What audit strategy would you recommend in the above scenario(2 marks)

b) Describe the audit risk in the above scenario (4 marks)

c)Which statement of financial position and income statement ledger accounts are potentially affected by the fraud?(5 marks)

d) Describe audit procedures that the auditor should employ to reduce the audit risk.(6 marks)

e)What should the auditors do upon discovering this fraud.(5 marks)