Question 1 TKS & Co. has been appointed the auditor of Sunlight Solar Limited (SSL) for the year ended 30 June, 2018. SSL is in the business of selling solar products to both domestic and commercial clients. The audit manager has tasked you with the responsibility of preparing an audit planning memorandum which must be reviewed by him before commencement of the audit. He has instructed you to follow the guidance of ISA 300: Planning an Audit of Financial Statements; which deals with the auditor's responsibility to plan an audit of financial statements.

Required: (a) Define the term 'audit planning memorandum.' (2 marks) (b) Explain the benefits of audit planning to the audit of the financial statements of SSL. (8marks) (c) Explain the matters you will consider in the preparation of the audit plan for SSL.

Question 2 You are part of the audit team to audit New Publications Limited (NPL) for the year ended 30 June, 2018. NPL operates in the media industry and runs a daily newspaper, radio and television. You are in charge of the audit of property, plant and equipment (PPE) and you are also reminded to apply analytical procedures where necessary during your audit. All staff on the audit assignment will be required to document their work and file the working papers on the audit file for review by the senior audit team members.

Required: a)Define the term 'analytical procedures'. (2 marks) b)Identify the various contents of working papers expected on the audit file of NPL. (10 marks) c)Identify the various assertions made by NPL in regard to PPE account balances.

Question 3 ACB Microfinance Limited (ACB) was identified by the Government of Uganda as one of the financial institutions to manage funds for capacity building and development of small and medium-sized entities (SMEs). The Auditor General has noted that ACB did not have an internal audit department and recommended establishment of this department as a precondition for managing the fund.

Required: (a) Explain the functions of an internal audit department to the management of ACB. (10 marks) (b) Identify the factors ACB should consider when designing an internal audit function.

Question 4 PTL & Co. (PTL) has been appointed the auditor of Kilimanjaro Airlines Limited (KAL) for the year ended 30 June 2018. KAL is a small airline which operates on routes within the Great Lakes region. PTL has never audited a company in the airline business. International Standards on Auditing (ISA), however, require PTL to gather sufficient reliable audit evidence in forming an opinion on whether financial statements of KAL give a true and fair view. In reaching this conclusion, PTL has decided that it needs the services of an expert.

Required: (a) Discuss the instances where PTL may require the services of an expert. (4 marks) (b) Identify areas where the work of an expert may be needed during an audit of an entity's financial statements. (6 marks) (c) Explain the factors PTL should consider before relying on the work of experts.

Question 5 FXL & Co. has been appointed the auditor of Booja Investments SACCO Limited (BIL) for the year ended 30 June, 2018. BIL has over 300 members who contribute monthly to the SACCO. Contributions may be received in cash or deposited on BIL's bank account at UDC bank. BIL invests in real estate and government treasury bonds in addition to offering loans to its members. BIL's annual turnover is Shs 500 million. You are part of the team to audit BIL and you have been assigned to audit cash and bank balances. Required: (a) Identify the objectives of auditing BIL's cash and bank balances. (5 marks) (b) Explain the audit procedures you will carry out for the audit of: (i) cash at bank. (7 marks) (ii) cash at hand (petty cash). (8 marks) Question 6 DSL is in the business of offering transport and courier services within the Great Lakes region. You are part of the audit for the year ended 30, June 2018 in charge of the audit of trade and other receivables. DSL has a long list of outstanding receivables that are aged above 365 days. It was agreed in the pre- audit meeting that DSL will increase on the provision for bad and doubtful debts as it is likely that some of these receivables are uncollectible.

Required: (a) Explain the audit procedures the auditor will use to audit trade and other receivables. (10 marks) (b) Explain the factors the auditor should consider in determining the accuracy of provision for bad and doubtful debts made by management.

Question 5 FXL & Co. has been appointed the auditor of Booja Investments SACCO Limited (BIL) for the year ended 30 June, 2018. BIL has over 300 members who contribute monthly to the SACCO. Contributions may be received in cash or deposited on BlL's bank account at UDC bank. BIL invests in real estate and government treasury bonds in addition to offering loans to its members. BlL's annual turnover is Shs 500 million. You are part of the team to audit BIL and you have been assigned to audit cash and bank balances. Required: (a) Identify the objectives of auditing BlL's cash and bank balances. (5 marks) (b) Explain the audit procedures you will carry out for the audit of: (i) cash at bank. (7 marks) (ii) cash at hand (petty cash). (8 marks) (Total 20 marks) Question 6 DSL is in the business of offering transport and courier services within the Great Lakes region. You are part of the audit for the year ended 30. June 2018 In charge of the audit of trade and other receivables. DSL has a long list of outstanding receivables that are aged above 365 days. It was agreed in the pre- audit meeting that DSL will increase on the provision for bad and doubtful debts as it is likely that some of these receivables are uncollectible. Required: (a) Explain the audit procedures the auditor will use to audit trade and other receivables. (10 marks) (b) Explain the factors the auditor should consider in determining the accuracy of provision for bad and doubtful debts made by management. (10 marks) (Total 20 marks)