Ican 2025 Audit And Assurance Question 2

Practice mixed question 2 from the 2025 Ican Audit And Assurance examination.

Ican 2025 Audit And Assurance Mixed
Question 2 ICAN • 2025 • AUDIT AND ASSURANCE • mixed

Demurin Supplies Limited operates a chain of supermarkets in Lagos. The external auditors, in the course of the current audit assignment, discovered cash misappropriation by some officers of the company. On enquiry, the officers concerned claimed that they borrowed the amounts (although without due approval). Further tests revealed that appropriate transactional recording process was not done for the misappropriated cash.

Requirements

( a )
Explain TWO types of fraud relating to fraudulent financial reporting, and TWO other types of fraud relating to misappropriation of assets according to ISA 240: The auditor’s responsibilities relating to fraud in the audit of the financial statements.
( b )
Explain the responsibility of the external auditor regarding the cash misappropriation in Demurin Supplies Limited.
( c )
Discuss the procedure the external auditor is expected to perform in identifying risks due to fraud.
( d )
Discuss SIX fraud risk factors that can increase the likelihood of fraud happening in an organisation.
( e )
Explain the management function that can control the risk of cash misappropriation as the organisation gets bigger.

Detailed Solution & Marking Scheme

Get the step-by-step solution, key points required by examiners and detailed marking guidance through the Edcrib AI Tutor.

Reveal Answer

About This Question

This is Ican 2025 Audit And Assurance Question 2. It is one of the mixed questions from the 2025 Ican Audit And Assurance examination.

View More Ican 2025 Audit And Assurance Questions More Ican Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support