AD34: Principles of Auditing

AD34: Principles of Auditing introduces learners to the fundamental concepts, principles, and practices of auditing within an organizational and regulatory environment. The course provides an understanding of the role of auditors, the audit process, professional ethics, audit planning, risk assessment, internal controls, audit evidence, and audit reporting.

Learners are equipped with the knowledge and skills required to conduct audit engagements in accordance with applicable auditing standards, ethical requirements, and professional guidelines. The course emphasizes the evaluation of financial information, assessment of internal control systems, detection and prevention of fraud and errors, and effective communication of audit findings.

Upon completion of the course, learners will be able to apply auditing principles and procedures in practical situations, evaluate audit risks, gather and assess audit evidence, prepare audit documentation, and understand the responsibilities of auditors in providing assurance and enhancing confidence in financial reporting.

CONTEXT:

• Nature, purpose and scope of auditing
• Definition of auditing, auditor and an audit
• Explain the principles and processes of an audit
• Differences between auditing and accounting
• The types and timing of audits
• Internal versus external and a focus on the complimentary role of internal to external, interim and final audit
• The users of audited financial statements and auditor reports
• Legal and professional requirements
• Appointment of an auditor
• Qualifications of an auditor
• Duties and rights of an auditor
• Dismissal of a company auditor
• Professional ethics
• Auditing standards and guidelines

• Panning and conducting an audit
• Objectives of planning for the audit work
• Audit plan for a new client
• Audit plan for an existing client
• Developing an overall audit plan
• Limitations of audit plans
• Methods and techniques of an audit

• Internal control system
• Definition of internal controls and internal control systems
• Purpose of internal control system
• Designing an internal control system
• Benefits and limitations of internal control system
• General controls on:
• Revenue
• Expenditure
• Assets
• Liabilities

• Error and fraud
• Definition of error and fraud
• Differences between error and fraud
• Types of errors and frauds
• Causes of frauds and fraud triangle

• Audit evidence
• Nature and source of audit evidence
• Financial statement assertion
• Types of audit evidence
• Gathering audit evidence
• Reliance on the work of an internal auditor
• Contents of audit working papers (excluding their preparation)
• Audit tests
• Substantive tests
• Analytical tests

• Audit risk
• Definition of audit risks
• Components of audit risks
• Risk-based audit

• Computerised auditing
• Benefits and drawbacks of computerized accounting systems
• Computer Aided Auditing Techniques (CAATs); Auditing around and through the computer
• Auditor’s report
• Purpose of the auditor’s report
• Legal provisions on auditor’s report
• Elements of the auditor’s report
• Key audit matters
• Forms of audit opinion

• Emerging issues and trends