The document provides information about an audit planning meeting between the auditor and Hook Co/Murray Co. It describes some key details about the company, including its operations, customers, suppliers, products, and recent initiatives. It then lists 5 or 6 potential audit risks that could be identified from the information provided and asks the candidate to explain the auditor's response to each risk in the audit planning process. The questions assess the candidate's ability to identify relevant audit risks based on client facts and propose appropriate audit procedures to address those risks.

1. Date of examination: 23/06/2023
Registration No SET- A
JECRC University
Department of Business Administration
End-Sem Semester Examination May 2023
BCM(H)- IV Sem
Subject: Audit & Assurance
Subject Code: BCM070A
Time: 3hr Maximum Marks: 100
Instructions: Attempt all the questions.
CO1: To understand the meaning and purpose of assurance engagements with reference to audit and
appreciate the regulatory environment affecting audit
CO2: To understand the concepts of audit risk and the importance of risk assessment as a backbone to
contemporary auditing.
CO3: To learn documentation and evaluation of internal controls, techniques & test of controls
CO4: To understand and carry out audit procedures to obtain sufficient appropriate evidence over various
classes of transactions and account balances.
CO5: To learn the relevance of review procedures and concepts surrounding the auditor’s report.
Section: A Case Study 20x2 = 40 Marks
Q1. It is 1 July 20X5. You are an audit senior at JPR Edwards & Co and you are currently planning the audit
of Hook Co for the year ending 30 September 20X5. Your firm was recently appointed as auditor after a
successful tender to provide audit and tax services. JPR Edward & Co were asked to tender after the lead
partner, Neisha Selvaratalm, met Hook Co’s CEO, Taylor Tucker, at a charity cricket match. Hook Co was
unhappy with the previous auditors as it was felt the audit did not add much value to the company.
Hook Co manufactures electrical goods such as MP3 players, smartphones and personal computers for larger
companies with established brands. Its key client, which represents 70% of its revenue, was the market leader
in smartphones and MP3 players last year with 60% market share.
Hook Co uses a number of suppliers to source components for its products. Most suppliers are based in the
UK, however microchips are imported from a number of overseas suppliers. Hook Co ’ s products are
assembled and packaged in one factory in the UK before being distributed to customers across the UK. The
work-in-progress balance is expected to be material at the year end.
During the year, Hook Co started developing smartphone applications. $1 million has been spent on an
application called ‘snore-o-meter’ which allows users to record the sounds they make while they are asleep.
There was a technical difficulty in production which meant the launch of ‘snore-o-meter’ has been delayed
from June to October 20X5.
To fund the expansion into smartphone applications Hook Co is seeking a listing on the London Stock
Exchange in the fourth quarter of the year.
Required:
Using the information provided, describe FIVE audit risks and explain the auditor's response to each
risk in planning the audit of Hook Co.
(Note: Prepare your answer using two columns headed Audit risk and Auditor’s response respectively.)

2. Or
Fraud and error present risks to an entity. Both internal and external auditors are required to deal with risks to
the entity. However, the responsibilities of internal and external auditors in relation to the risk of fraud anderror
differ.
Required:
(a) Explain how the internal audit function helps an entity deal with the risk of fraud and error.
(b)Explain the responsibilities of external auditors in respect of the risk of fraud and error in an audit of
financial statements.
Section: B (Very Short Answers) 10x1= 10 Marks
Q1. (CO1) What is Audit Risk?
Q2. (CO2) why are external auditors interested in corporate governance?
Q3 (CO1) Define Test Checking?
Q4. (CO3) What do you mean by control risk?
Q5. (CO3) Can an Auditor change the Inherent Risk?
Q6. (CO4) Who has the ownership of auditing working papers?
Q7. (CO1) What are the requirements of the internal audit department?
Q8. (CO3) What do you mean by Interim Audit?
Q9. (CO2) What do you mean by internal control?
Q10. (CO4) what is meant by corporate governance?
Section: C (Long Answers) 5 x 10=50 Marks
Q1. (CO3) An Audit Program to be serviceable must be elastic.” Why?
Or
(CO1) “ discuss the statement, Manipulation of accounts does not necessarily involve the
misappropriation of property.” Give three examples to illustrate this statement.
Q2. (CO1) List and explain the elements of an assurance engagement.
Or
(CO3) What are the key activities of the internal audit function. how its different from external audit?
Q3. (CO4) Explain FOUR rights that enable auditors to carry out their duties.
Or
(CO4) State the circumstances in which a person is not eligible to act as an auditor.
Q4. (CO1) What is meant by Audit? Mention the objects and advantages of an audit.
Or
(CO1) “Test checking reduces the workload of the auditor, not the responsibilities”. Explain the statement.
Q5. (CO4) List and explain FOUR factors that will influence the auditor’s judgment regarding the sufficiency
of the evidence obtained.
or
(CO3) Define materiality and explain how the level of materiality is assessed.

3. Date of examination: 23/06/2023
Registration No SET- B
JECRC University
Department of Business Administration
End-Sem Semester Examination May 2023
BCM(H)- IV Sem
Subject: Audit & Assurance
Subject Code: BCM070A
Time: 3hr. Maximum Marks: 100
Instructions: Attempt all the questions.
CO1: To understand the meaning and purpose of assurance engagements with reference to audit and
appreciate the regulatory environment affecting audit
CO2: To understand the concepts of audit risk and the importance of risk assessment as a backbone to
contemporary auditing.
CO3: To learn documentation and evaluation of internal controls, techniques & test of controls
CO4: To understand and carry out audit procedures to obtain sufficient appropriate evidence over various
classes of transactions and account balances.
CO5: To learn the relevance of review procedures and concepts surrounding the auditor’s report.
Section: A Case Study 20 x 2 = 40 Marks
Your firm Wimble & Co has recently accepted appointment as auditor of Murray Co (a manufacturer of sports
equipment). Having sold your shares in Murray Co, you have been assigned as audit manager and you have
started planning the audit (although you were an employee of Murray Co, this was many years ago and you
did not have any involvement in the preparation of the financial statements). You have held a meeting with the
client and have ascertained the following:
Murray Co manufactures sports equipment. Most items of equipment, such as tennis rackets, hockey sticks and
goals, take less than one day to manufacture. Murray Co's largest revenue generating product, ergometers
(rowing machines), takes up to one week to manufacture. Murray Co refurbished the assembly line for the
ergometers during the year. Murray Co uses a third party warehouse provider to store the manufactured
ergometers and approximately one quarter of the other equipment.
Historically, Murray Co has only sold to retailers. For the first time this year, Murray Co has made sales directly
to consumers, via a new website. The website is directly linked to the finance system, recording sales
automatically. Website customers pay on ordering. The website development costs have been capitalised. This
initiative was implemented to respond to market demands, as retailer sales have fallen dramatically inthe
last two years. Some of Murray Co's retail customers are struggling to pay their outstanding balances. Several
of the sales team were made redundant last month as a result of the falling retailer sales.
Murray Co is planning to list on the stock exchange next year.
Required:
Using the information provided, describe SIX audit risks and explain the auditor's response to each
risk in planning the audit of Murray Co.
Note: Prepare your answer using two columns headed Audit risk and Auditor’s response respectively.
Or

4. Fraud and error present risks to an entity. Both internal and external auditors are required to deal with risks
to the entity. However, the responsibilities of internal and external auditors in relation to the risk of fraud and
error differ.
Required:
(a) Explain how the internal audit function helps an entity deal with the risk of fraud and error.
(b)Explain the responsibilities of external auditors in respect of the risk of fraud and error in an audit
of financial statements.
Section: B (Very Short Answers) 10x1= 10 Marks
Q1. (CO1) What is Audit Risk?
Q2. (CO2) why are external auditors interested in corporate governance?
Q3. (CO4) what is meant by corporate governance?
Q4. (CO3) What do you mean by control risk?
Q5. (CO3) Can an Auditor change the Inherent Risk?
Q6. (CO4) Who has the ownership of auditing working papers?
Q7. (CO2) What are the requirements of the internal audit department?
Q8. (CO3) What do you mean by Interim Audit?
Q9. (CO3) What do you mean by internal control?
Q10. (CO1) Define Test Checking?
Section: C (Long Answers) 2 x 10=20 Marks
Q1. (CO3) An Audit Program to be serviceable must be elastic.” Why?
Or
(CO1) “discuss the statement, Manipulation of accounts does not necessarily involve the
misappropriation of property.” Give three examples to illustrate this statement.
Q2. (CO1) List and explain the elements of an assurance engagement.
Or
(CO3) What are the key activities of the internal audit function. how it’s different from external audit?
Q3. (CO4) Explain FOUR rights that enable auditors to carry out their duties.
Or
(CO1) “The purpose of test checking is to assess the reliability of the organization's financial statements,
internal controls, and compliance with applicable laws and regulations.”. Explain the statement.
Q4. (CO1) What is meant by Audit? Mention the objects and advantages of an audit.
Or
(CO4) state the circumstances in which a person is not eligible to act as an auditor.
Q5. (CO4) What do you mean by Audit report. Define the various type of it
Or
(CO3) Internal control is a vital component of the audit process. Explain.

5. Registration No
SET- A
JECRC University
Department of Business Administration
End-Sem Semester Examination June 2023
MBA- II Sem
Subject: Audit & Assurance
Subject Code: MBA070A
Time: 3hr. Maximum Marks: 100
Instructions: Attempt all the questions.
CO1: To understand the meaning and purpose of assurance engagements with reference to audit and
appreciate the regulatory environment affecting audit
CO2: To understand the concepts of audit risk and the importance of risk assessment as a backbone to
contemporary auditing.
CO3: To learn documentation and evaluation of internal controls, techniques & test of controls
CO4: To understand and carry out audit procedures to obtain sufficient appropriate evidence over various
classes of transactions and account balances.
CO5: To learn the relevance of review procedures and concepts surrounding the auditor’s report.
Section: A Case Study 20x2 = 40 Marks
It is 1 July 20X5. You are an audit senior at JPR Edwards & Co and you are currently planning the audit of
Hook Co for the year ending 30 September 20X5. Your firm was recently appointed as auditor after a successful
tender to provide audit and tax services. JPR Edward & Co were asked to tender after the lead partner, Neisha
Selvaratalm, met Hook Co’s CEO, Taylor Tucker, at a charity cricket match. Hook Co was unhappy with the
previous auditors as it was felt the audit did not add much value to the company.
Hook Co manufactures electrical goods such as MP3 players, smartphones and personal computers for larger
companies with established brands. Its key client, which represents 70% of its revenue, was the market leader
in smartphones and MP3 players last year with 60% market share.
Hook Co uses a number of suppliers to source components for its products. Most suppliers are based in the
UK, however microchips are imported from a number of overseas suppliers. Hook Co ’ s products are
assembled and packaged in one factory in the UK before being distributed to customers across the UK. The
work-in-progress balance is expected to be material at the year end.
During the year, Hook Co started developing smartphone applications. $1 million has been spent on an
application called ‘snore-o-meter’ which allows users to record the sounds they make while they are asleep.
There was a technical difficulty in production which meant the launch of ‘snore-o-meter’ has been delayed
from June to October 20X5.
To fund the expansion into smartphone applications Hook Co is seeking a listing on the London Stock
Exchange in the fourth quarter of the year.
Required:
Using the information provided, describe FIVE audit risks and explain the auditor's response to each
risk in planning the audit of Hook Co.
(Note: Prepare your answer using two columns headed Audit risk and Auditor’s response respectively.)
Or

6. Fraud and error present risks to an entity. Both internal and external auditors are required to deal with
risks to the entity. However, the responsibilities of internal and external auditors in relation to the risk
of fraud and error differ.
Required:
(a) Explain how the internal audit function helps an entity deal with the risk of fraud and error.
(b) Explain the responsibilities of external auditors in respect of the risk of fraud and error in an
audit of financial statements
Section: B (Very Short Answers) 10x1= 10 Marks
Q1. (CO1) What is Audit Risk?
Q2. (CO2) why are external auditors interested in corporate governance?
Q3. (CO4) what is meant by corporate governance?
Q4. (CO3) What do you mean by control risk?
Q5. (CO3) Can an Auditor change the Inherent Risk?
Q6. (CO1) Who has the ownership of auditing working papers?
Q7. (CO1) What are the requirements of the internal audit department?
Q8. (CO1) What do you mean by Interim Audit?
Q9. (CO1) What do you mean by internal control?
Q10. (CO1) Define Test Checking?
Section: C (Long Answers) 2 x 10=20 Marks
Q1. (CO3) An Audit Program to be serviceable must be elastic.” Why?
Or
(CO1) “discuss the statement, Manipulation of accounts does not necessarily involve the
misappropriation of property.” Give three examples to illustrate this statement.
Q2. (CO1) List and explain the elements of an assurance engagement.
Or
(CO3) What are the key activities of the internal audit function. how its different from external
audit?
Q3. (CO4) Explain FOUR rights that enable auditors to carry out their duties.
Or
(CO4) state the circumstances in which a person is not eligible to act as an auditor.
Q4. (CO1) What is meant by Audit? Mention the objects and advantages of an audit.
Or
(CO1) “Test checking reduces the workload of the auditor, not the responsibilities”. Explain
the statement.
Q5. (CO4) List and explain FOUR factors that will influence the auditor’s judgment regarding the
sufficiency of the evidence obtained.
or
(CO3) Define materiality and explain how the level of materiality is assessed.

7. Registration No SET- B
JECRC University
Department of Business Administration
End-Sem Semester Examination June 2023
MBA- II Sem
Subject: Audit & Assurance
Subject Code: MBA070A
Time: 1hr.30Mins Maximum Marks: 100
Instructions: Attempt all the questions.
CO1: To understand the meaning and purpose of assurance engagements with reference to audit and
appreciate the regulatory environment affecting audit
CO2: To understand the concepts of audit risk and the importance of risk assessment as a backbone to
contemporary auditing.
CO3: To learn documentation and evaluation of internal controls, techniques & test of controls
CO4: To understand and carry out audit procedures to obtain sufficient appropriate evidence over various
classes of transactions and account balances.
CO5: To learn the relevance of review procedures and concepts surrounding the auditor’s report.
Section: A Case Study 20 x 2 = 40 Marks
Your firm Wimble & Co has recently accepted appointment as auditor of Murray Co (a manufacturer of sports
equipment). Having sold your shares in Murray Co, you have been assigned as audit manager and you have
started planning the audit (although you were an employee of Murray Co, this was many years ago and you
did not have any involvement in the preparation of the financial statements). You have held a meeting with the
client and have ascertained the following:
Murray Co manufactures sports equipment. Most items of equipment, such as tennis rackets, hockey sticks and
goals, take less than one day to manufacture. Murray Co's largest revenue generating product, ergometers
(rowing machines), takes up to one week to manufacture. Murray Co refurbished the assembly line for the
ergometers during the year. Murray Co uses a third party warehouse provider to store the manufactured
ergometers and approximately one quarter of the other equipment.
Historically, Murray Co has only sold to retailers. For the first time this year, Murray Co has made sales directly
to consumers, via a new website. The website is directly linked to the finance system, recording sales
automatically. Website customers pay on ordering. The website development costs have been capitalised. This
initiative was implemented to respond to market demands, as retailer sales have fallen dramatically inthe
last two years. Some of Murray Co's retail customers are struggling to pay their outstanding balances. Several
of the sales team were made redundant last month as a result of the falling retailer sales.
Murray Co is planning to list on the stock exchange next year.
Required:
Using the information provided, describe SIX audit risks and explain the auditor's response to each
risk in planning the audit of Murray Co.
Note: Prepare your answer using two columns headed Audit risk and Auditor’s response respectively.
Or
Fraud and error present risks to an entity. Both internal and external auditors are required to deal with risks
to the entity. However, the responsibilities of internal and external auditors in relation to the risk of fraud and
error differ.
Required:

8. (a) Explain how the internal audit function helps an entity deal with the risk of fraud and
error.
(b)Explain the responsibilities of external auditors in respect of the risk of fraud and error
in an auditof financial statements.
Section: B (Very Short Answers) 10x1= 10 Marks
Q1. (CO1) What is Audit Risk?
Q2. (CO2) why are external auditors interested in corporate
governance?Q3. (CO4) what is meant by corporate
governance?
Q4. (CO3) What do you mean by control risk?
Q5. (CO3) Can an Auditor change the Inherent Risk?
Q6. (CO4) Who has the ownership of auditing working papers?
Q7. (CO2) What are the requirements of the internal audit
department?Q8. (CO3) What do you mean by Interim
Audit?
Q9. (CO3) What do you mean by
internal control?Q10. (CO1) Define
Test Checking?
Section: C (Long Answers) 2 x 10=20 Marks
Q1. (CO3) An Audit Program to be serviceable must be elastic.” Why?
Or
(CO1) “discuss the statement, Manipulation of accounts does not necessarily involve the
misappropriation of property.” Give three examples to illustrate this statement.
Q2. (CO1) List and explain the elements of an assurance engagement.
Or
(CO3) What are the key activities of the internal audit function. how it’s different from external
audit?
Q3. (CO4) Explain FOUR rights that enable auditors to carry out their duties.
Or
(CO1) “The purpose of test checking is to assess the reliability of the organization's financial
statements,internal controls, and compliance with applicable laws and regulations.”.
Explain the statement.
Q4. (CO1) What is meant by Audit? Mention the objects and advantages of an audit.
Or
(CO4) state the circumstances in which a person is not eligible to act as an auditor.
Q5. (CO4) What do you mean by Audit report. Define the various type of it
Or
(CO3) Internal control is a vital component of the audit process. Explain.