SEPTEMBER 2019 CONFIDENTIAL (Total: 100 marks) INSTRUCTION: Answer ALL questions. Please use the answer booklet provided. Question 1 (a) The accounting profession as a whole plays a key role in enhancing investor confidence and upholding public interest. Auditors are commonly engaged to give assurance services to the users of financial statements. Briefly explain the purposes of an audit of historical financial statements. (2 marks) ii. Define the term 'expectation gap in auditing (2 marks) (b) Planning an audit involves establishing the overall audit strategy for the engagement and developing an audit plan. ISA 210 requires auditors to document their understanding with the client in an engagement letter i. Discuss the primary purpose of an audit engagement letter. (2 marks) State FOUR (4) matters should be covered in engagement letter. (4 marks) (c) Auditors routinely conduct analytical procedures in the planning, testing, and completion phases for audit task. Explain the purposes of performing analytical procedures in each phase of the audit task (6 marks) it. State FOUR (4) types of comparison analysis should an auditor use when performing preliminary analytical procedures. (4 marks) [20 marks] EAB21103_Audit 1 Page 2 of 8