Question 3
ICAN
•
2026
•
ADVANCED AUDIT ASSURANCE AND FORENSICS
•
mixed
Case Stimulus
ABC Manufacturing Plc. is a large Nigerian company listed on the Nigerian Exchange Limited (NGX). In line with the provisions of the Companies and Allied Matters Act (CAMA) 2020, the company appointed Obed Ijahdulah & Co. (Chartered Accountants), as its statutory auditor. During the planning stage of the audit, the Audit Manager noted that: (i) some members of the management were reluctant to provide certain internal control documentation; (ii) the internal audit department exists but seems under-resourced, performing mainly compliance checks without focusing on risk management; (iii) the company recently faced shareholders’ complaints regarding late and unreliable financial reporting; and (iv) during testing, the auditors discovered evidence of inventory obsolescence that management had not disclosed.
Requirements
(
a
)
Discuss the factors to be considered when the entity wants to outsource its internal audit functions.
(
b
)
Discuss the importance of the internal audit functions to the organisation.
(
c
)
Evaluate the disadvantages of outsourcing the internal audit function to an external accounting firm.
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About This Question
This is
Ican
2026
Advanced Audit Assurance And Forensics
Question 3.
It is one of the
mixed
questions from the
2026
Ican
Advanced Audit Assurance And Forensics
examination.