Question 4
ICAN
•
2026
•
ADVANCED AUDIT ASSURANCE AND FORENSICS
•
mixed
Case Stimulus
BlueBird Airlines Plc., a Nigerian listed company, is audited by Lily Prime & Co. (Chartered Accountants). The company recently faced some financial difficulties due to rising operating costs and a downturn in passenger traffic. During the audit: i. the management could not provide clear evidence of certain aircraft maintenance expenses; ii. some revenue contracts were only confirmed verbally, without written agreements; iii. the management provided a written representation regarding the completeness of liabilities; and iv. the auditor noted potential going concern issues due to recurring losses and heavy loan obligations.
Requirements
(
a
)
The need for maintaining audit documentation and explain its role in supporting conclusions and audit opinion.
(
b
)
Circumstances where written representations (ISA 580) and discussions with senior audit team members (ISA 450) would be required, and explain how these should be documented.
(
c
)
The appropriate section of the audit report (ISA 570 Revised), distinguishing between a going concern paragraph and a qualified opinion, if the auditor concludes that there is a material uncertainty relating to going concern.
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About This Question
This is
Ican
2026
Advanced Audit Assurance And Forensics
Question 4.
It is one of the
mixed
questions from the
2026
Ican
Advanced Audit Assurance And Forensics
examination.