Question 1
ICAN
•
2026
•
ADVANCED AUDIT ASSURANCE AND FORENSICS
•
mixed
Case Stimulus
New Breath Bank Plc. is a listed Nigerian Deposit Money bank, audited by Zamia Bolus & Co. (Chartered Accountants). The following observations were recorded during the 2024 audit engagement: i. management had previously delayed salary payments due to the difficulties in linking NIN to staff bank accounts; ii. internal audit department existed, but performed only compliance reviews; there were no strong risk management processes; iii. the external auditors discovered irregular loan approvals and significant non-performing loans; iv. management insisted there were no going concern issues, despite heavy losses and regulatory sanctions; v. the bank recently adopted blockchain technology for loan disbursement records, but auditors were unsure of how to validate its accuracy; vi. a whistle-blower alleged that the Finance Director diverted funds and hid assets under names of family members; and vii. the Audit Partner was offered expensive gifts by management during the audit.
Requirements
(
a
)
Explain the objectives of an external audit and evaluate the possible audit expectation gap between New Breath’s shareholders and Zamia Bolus & Co.
(
b
)
Assess New Breath Bank’s internal control weaknesses, explaining the responsibilities of management and auditors in instituting and assessing internal control (ISA 315 Revised).
(
c
)
State the types and sources of audit evidence required in this case (ISA 500 and ISA 580), and advise how forensic techniques may be used to investigate the whistle-blower’s allegation of hidden assets.
(
d
)
Assess the ethical threats and conflicts arising in this engagement (gift offer, whistleblowing, governance concerns), and propose safeguards in line with IFAC and ICAN codes.
(
e
)
Explain how technology (blockchain validation, statistical analysis, AI tools) may be applied by the auditor to strengthen assurance in the audit of New Breath.
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
2026
Advanced Audit Assurance And Forensics
Question 1.
It is one of the
mixed
questions from the
2026
Ican
Advanced Audit Assurance And Forensics
examination.