Module Aims: the aim of this module is to introduce the student to the concept of auditing and the environment in which it operates and to provide an understanding of the auditing process in a logical and sequential manner, enabling the student progressively to consolidate their understanding of the audit concepts and processes.
Corporate Governance and Statutory Audit
What is an audit.The need for audit and historical development of auditing and assurance.Types of audit and assurance engagement.Statutory Framework.Regulatory Framework.Ethical Framework.Independence of Auditors.Corporate Governance. Historical origins and the objectives of performing an auditEvolution of Auditing practicesThe Accounting profession and its associated organisationsScope of auditing/assurance services.Audit regulationTypes of audit activity and auditor. Regulatory frameworkConcepts of accountability, stewardship, agency and the responsibility of auditors to the wider population of users of accounts. The internal auditor and their role in the external audit process.
Fraud , Compliance with Laws and Regulations and Auditor Liability.
Audit approach to fraud and error.Aggressive earnings management.Responsibilities for fraud and error.Discussion among the audit team.Detection of fraud.Fraud and CAATs.managment representations.Duty and Right of Auditors to report to managment and third parties.Required documentation relating to detecting and preventing fraud .Current environment and fraud.Steps to prevent fraud.Major fraud scandals.Outcome of litigation and findings affecting auditor liability.
The Audit Process
Acceptance of the audit.Planning the audit.Documenting of audit plan and strategy,performing the audit and gathering audit evidence.Completion of the audit.
The Risk Assessment Process
Introduction to business risk and audit risk.Auditors approach to assessing the risk of material misstatement.Risk assessment procedures used by the auditor to obtain an understanding of the entity.Understanding the entity, its environment, including its internals control.Assessing the risks of material misstatement.Communicating with those charged with governance and management.Auditors response to assessed risks.Types of Audit procedures to be performed.presentation and disclosure. Evaluation of audit evidence.Documentation. Relationship between materiality and audit risk.
Gathering Audit Evidence
Audit evidence and its relevance to the audit process.Sufficient, appropriate and reliable audit evidence.Audit assertions and obtaining audit evidence.Methods of obtaining audit evidence.Evaluating audit evidence.Tests of controls and substantive testing.Substantive testing and testing of details. Audit sampling. Selection of work and appraisal of work of experts. Substantive Analytical procedures.
Controls and controls testing.
Internal controlThe control environmentImportance of controls.Stages in reviewing controls.Controls in the main business cycles.Tangible Fixed Assets and inventories.Revenues adn Receivables. Bank and Cash. Investments. Purchases and Payables. Share Capital and Reserves.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Other Assessment(s) | 30 |
| Formal Examination | 70 |