ICAN 2024 Audit and Assurance | Mixed

FINPAY FINANCIAL SOLUTIONS LIMITED FinPay, an innovative payment service bank, operates from its office on Lagos Island, overseeing all financial transactions, customer interactions, and relationships nationwide. The bank streamlines its processes for customer convenience, embracing the digital age. Customers' bank accounts are linked to their GSM phone numbers, with the initial zero removed. All banking operations, from account creation and deposits to withdrawals and account closure, are conducted seamlessly through the bank's mobile App, which can be easily downloaded from popular App stores. Access to the bank's mobile App is allowed using an account number and a private six-digit PIN. A prospective customer completes the onboarding process by uploading scanned passport photos, ID card, utility bill, alongside providing other essential personal information, like name, NIN, telephone number, email address, and residential address. To facilitate transactions, a four-digit PIN linked to the customer's debit card is activated at Automated Teller Machines (ATMs). Additionally, customers can leverage USSD codes for payments. Customers are required to use their registered phone numbers on their smartphones when transacting businesses with the bank. In the event of a declined transaction, swift resolution is a priority. Debits are promptly reversed, ensuring customer satisfaction. Customers can report issues directly through the mobile App or via email, and FinPay's responsive support team resolves matters without necessitating a visit to the bank's physical office. This efficiency cements FinPay's reputation as a leading online bank in Nigeria. FinPay expedites the delivery of debit cards to customers, ensuring they reach their designated addresses within 48 hours of account creation. Furthermore, a proactive follow-up call is made just 24 hours after opening an account, enhancing the overall customer experience. With a focus on catering for tech-savvy Nigerian youths, FinPay is steadily expanding its customer base. The bank even offers small, easily accessible loans over a six-month period, further attracting and retaining a young clientele. Some customers instruct FinPay to pay monthly DStv subscriptions or send amounts to third parties on regular basis, by activating a prompt on the mobile App. For added convenience, FinPay features a responsive chatbot, named Bobo. Customers can engage with Bobo through the bank's mobile App, website, and social media channels, providing another layer of support and accessibility. This comprehensive approach positions FinPay as a forward-thinking financial institution at the forefront of digital banking in Nigeria.

You are the Audit Senior-in-charge of the audit of Edinburg Nigeria Limited. The management of the company made some representations to you, which include: - Inventory worth ₦15 million in its only branch in Niger Republic, which you couldn't visit because of the ongoing civil unrest in that country; - A donation of ₦500,000 was made to a motherless babies home by the Chairman but it was not receipted; and - The chairman received medical treatment amounting to ₦600,000 during his official visit to Germany to negotiate with equipment vendors, and he did not come back with any documentary evidence. You have reported these matters to the partner of your firm, Olumisi Oregun & Co.

MetroPower Limited, a major public utility company, was entrusted with providing electricity to millions of residents and businesses. Mr. Mark, the Lead Technician, at MetroPower for many years is responsible for maintaining the electrical grid to ensure reliable supply of electricity to the city. MetroPower's financial statements were subjected to annual audits. When Mrs. Jennifer assumed her role as the department's supervisor, she implemented cost-cutting measures aimed at reducing the budget allocated for routine maintenance. This decision raised significant ethical concerns, as Mr. Mark believed it would compromise the safety and reliability of the electrical grid. He knew that such actions could lead to power outages and electrical hazards. Mr. Mark found himself in a dilemma, torn between his responsibility to make electricity available and the potential consequences of opposing his new supervisor's cost-cutting measures. Mr. Mark documented his concerns, maintaining detailed records of previous maintenance schedules and their impact on the grid's reliability. The auditors came across the evidence of reduced costs of maintenance and inspections in MetroPower.

The International Standards on Auditing 200 (ISA 200) made some important pronouncements on the independent Auditor.

Each assurance engagement is classified on two dimensions: It is either a reasonable assurance engagement or a limited assurance engagement; and either it is an attestation engagement or a direct engagement.

Abati Quarries Limited was registered with the Corporate Affairs Commission in 2017 and it commenced operations in 2019. The beginning was rough, as the property, plant and equipment costs were beyond the initial projections, and the company had to make do with fairly used equipment, which kept breaking down along the line. Products were meant for supply to its parent company, Abati Estates, which is into large scale development of residential and commercial property in Lagos. As a result, Abati Quarries Limited hardly had substantial finished goods (granites) as closing inventory. The Audit Manager later insisted that boulder rocks blasted at the site should be regarded as unfinished inventory or work-in-progress. In addition, the performance of Abati Quarries Limited was at variance with the performance of competitors in the industry, as the company had been returning losses from inception. The Audit Manager then required that the audit team should intimate the General Manager of the company of the decision to determine the cost of the boulder rocks and include it in the financial statements as closing work-in-progress. The General Manager, however, disagreed. The Audit Manager therefore, instructed you, the Audit Senior, to draft appropriate paragraph(s) on Key Audit Matters (KAMs), suitable for inclusion in the Independent Auditor's report, to bring this matter to the attention of the company's shareholders.