Ican 2025 Advanced Audit And Assurance Question 1

Blackmart Plc is one of your listed audit clients which offers property management, property financing and mortgage services to its clients. During the audit of the company, the following matters came to your attention: (i) Grace Sadiku, one of the audit team members has provisionally agreed to take out a mortgage facility with a duration of 10 years using the facility of Blackmart Plc to finance her first residential property. In the area where the property is located, the first residential property gets full tax waiver on the entire installments paid within the first 5 years which is usually a significant tax incentive. The mortgage facility would be secured by the property and it has been defined as the best offer available in the market; (ii) Also, during the period, the Human Resources (HR) Manager of Blackmart Plc resigned, and the company had reached out to your firm to provide a staff on secondment till a substantive HR Manager is appointed; (iii) The management of Blackmart has also informed your audit team that the company maintains only two bank accounts and there will be no need to circularise the banks as the auditors can rely on the balances as generated from the bank’s portal as at the end of the year; and (iv) The audit committee has asked your firm to work with the internal audit team to design internal controls over the part of the accounting system which deals with revenue, and also evaluate the operating effectiveness of the internal controls.