INFOLINK UINVERSITY COLLEGE DEPARTMENT OF

ACCOUNTING AND FINANCE 2017 1ST SEMESTER AUDITING

AND PRACTICE I COURSE OUT LINE
Courses of the Module

Course Number AcFn4061

Course Title Auditing principles & Practice I

ETCTS Credits 5

Contact Hours (per week) 3

After studying this course, the student should be able to:

 Describe the nature of an audit and explain the economic and legal basis for
auditing.
Course Objectives &
Competences to be  Demonstrate ability in the use of International Auditing Standards in various audit
Acquired issues.

 Assess professional ethics with respect to the audit function and review the main
components of Code of Professional Conduct.

 Examine the auditor's legal liability to clients and third parties.

 Demonstrate expertise in planning and carrying out audit procedures in accordanc

with International Auditing Standards and demonstrate how an auditor documents
his work.

 Demonstrate how the auditor obtains an understanding of the entity and its
environment and assesses the risk of material misstatement.

 Explain how materiality and various risk assessments impact the audit program.

 Determine the audit procedure needed to audit any assertion.

 Relate management assertions to general and specific audit objectives, relate audi
evidence, and audit objectives to evidence-gathering decisions.

 Demonstrate ability in carrying out functions of internal control systems and

examine the elements of an internal control structure and their components.

 Describe the audit report and explain conditions for qualifications in the audit
report.

Course Description The emphasis of this course is on conceptual, theoretical and practical aspects of auditing
 financial statements. The course is designed to develop knowledge, understanding, and
practical application of core external audit processes based on the principles of internation
auditing standards.

The course commences with an introduction to assurance and auditing and proceeds to the
discussion of audit profession and regulatory organizations, International Auditing Standar
(ISAs), professional ethics and legal liability issues for auditors. Next is a discussion that hel
the student to recognize statement assertions, the evaluation of the risks to which these
assertions are susceptible, and the methodology of planning to assess the degree to which
these risks give rise to error or fraud in financial information. The course also covers issues
of audit evidence, audit methodology, and emphasizes assessment of the internal control
system and its impact on audit risk. The last part of the course examines the content of an
audit report and the reason for issuing varying types of reports.

WEEKS Course Contents ISAs References

1. The Nature, Purpose, Scope of Audit and  IAASB framework

Assurance Services
2WEEKS  ISA 200, Overall
1.1 Meaning Of Audit Objectives of the
{1ST-2rd } Independent Audit
1.2 Assurance Services: Overview and the Conduct of
1.3 Why Audits are Conducted an Audit in
Accordance with
1.4 Types of Audit and Auditors International
Standards on
Auditing

2. The Auditing Profession  ISA 200, Overall

Objectives of the
3WEEKS 1.1 The Regulatory Framework Governing Auditing Independent Audit
{4RD- 6TH } 1.2 International Standards on Auditing (ISA) and the Conduct of
an Audit in
1.3 Professional Ethics: Fundamental Principles, Threats Accordance with
and Safeguards International
Standards on
1.4 Legal Liability of Auditors
Auditing
1.5 Rights and Duties, Appointment, Dismissal and
 ISA 250,
Resignation of an Auditor
Consideration of
Laws and
Regulations in an
Audit of Financial
Statements
 2. Materiality and Risk Assessment  ISA 320, Materiality
in Planning and
2 WEEKS 2.1 Audit Risk Performing an Aud
{7TH - 8 TH } 2.2 Materiality  ISA 330, The
Auditor's Response
to Assessed Risks

3. Client Acceptance and Planning the Audit  ISA 210, Agreeing

the Terms of Audit
3.1 Client Acceptance and Continuance Engagements
2WEEKs 3.2 Planning the Audit  ISA 300, Planning a
{9TH - 10tTH} 3.3 Appointment, Remuneration, and Removal of Audit of Financial
Statements
Auditors
 ISA 315, Identifying
and Assessing the
Risks of Material
Misstatement
through
Understanding the
Entity and Its
Environment

 ISA 320, Materiality

in Planning and
Performing an Aud

 ISA 330, The

Auditor's Response
to Assessed Risks

 ISA 520, Analytical

Procedures

ISA 550, Related Parties

4. Audit Responsibility, Objectives, Evidence and  ISA 240, The

Recording the Audit Auditor's
2WEEKs Responsibilities
4.1 Audit Responsibility Relating to Fraud in
{11TH - 12tTH}
4.2 Management Assertions an Audit of Financi
Statements
4.3 Audit Objectives
 ISA 250,
4.4 Audit Evidence Consideration of
Laws and
 4.5 Audit Documentation Regulations in an
Audit of Financial
Statements

 ISA 260,
Communication wi
Those Charged with
Governance

 ISA 265,
Communicating
Deficiencies in
Internal Control to
Those Charged with
Governance and
Management

 ISA 230, Audit

Documentation

 ISA 500, Audit

Evidence

 ISA 501, Audit

Evidence-Specific
Considerations for
Selected Items

ISA 505, External

Confirmations

1WEEK 5. Internal Control  ISA 260,

Communication wi
{13TH } 5.1 Meaning and Objectives of internal controls Those Charged with
5.2 The Basic Elements of internal controls Governance

5.3 Recording Internal Control System  ISA 265,

Communicating
5.4 Internal Control and External Auditor Deficiencies in
Internal Control to
5.5 Internal Control and Internal Auditor
Those Charged with
5.6 Inherent Limitations Governance and
Management

ISA 315, Identifying and

Assessing the Risks of
Material Misstatement
through Understanding the
 Entity and Its Environment

1WEEK 6. Audit Reports  ISA 700, Forming a

Opinion and
{14TH } 6.1 Types of Audit Reports Reporting on
6.2 Basic Contents of a Standard Audit Report Financial Statemen

6.3 Audit Opinion  ISA 705,

Modifications to th
Opinion in the
Independent
Auditor's Report

 ISA 706, Emphasis

Matter Paragraphs
and Other Matter
Paragraphs in the
Independent
Auditor's Report

 ISA 710,
Comparative
Information-
Corresponding
Figures and
Comparative
Financial Statemen

ISA 720, The Auditor's

Responsibilities Relating to
Other Information in
Documents Containing
Audited Financial
Statements

Teaching &Learning In modular system, the focus is the student’s self-directed search for knowledge. Lectures,
method/ Strategy discussions, homework, reading assignment, textbooks, lecture notes, and other resources
are all provided to help students learn. Interactive lecture and class discussion are an
integral part of the instructional program. Students are therefore required to attend all
lectures and read all required readings in order to fully grasp and appreciate the concepts o
auditing.

Assessment/Evaluation The evaluation scheme will be as follows:

Component Weight coverage

Component Weight coverage

 Continuous Assessment 30%
& presentation

Mid Exam 20%

Final Exam 50%

Work load in hours

Hours Required
Total
Assess Tutor Self- Assign Advi ECTS
Hrs
Lectures Lab ments ials Studies ment sing

48 - 22 12 64 - - 162 6

Role of the students In class, the instructor will discuss auditing concepts and students are expected to
participate in class discussions on a regular basis. Participation is a function of students’
willingness to share their ideas with the class in terms of both questions and answers.
Students learn best by actively questioning and explaining.

Participation, for the purposes of the participation grade, is not merely responding to a
question, with a ‘yes’ or a ‘no’ answer. Participation means a verbal contribution to the
discussion, the lessons and other current events relating to auditing. This is an important
part of auditing – and it is a full expectation in the auditing profession – that all team
members, regardless of their level in the firm or organization will participate in discussions
about audit findings, proposed audit adjustments, or other pertinent issues relating to the
auditee client.

1. In order to participate, students must:

 Attend class

 Be prepared for the lesson

 Contribute to the class discussion

 Professionalism is an expectation

2. General Conduct and Behaviour

Students are expected to conduct themselves with consideration and respect for the needs
of fellow students and teaching staff. Conduct which unduly disrupts or interferes with a
class, such as ringing or talking on mobile phones, is not acceptable.

3. Other Student Responsibilities include:

 Evaluate the course and instructor at least once each term.

 Completing assignments; studying for exams; and seeking assistance or extra

work to extend and clarify his/her understanding; and choose an approach tha
 best suits his/her learning style and goals in this course.

Role of the instructor In a learning environment, everyone becomes a teacher and everyone becomes a student.
Learning is the student’s personal responsibility. The instructor is a mentor, facilitator, and
coach in the student’s active and unique learning process. The instructor is responsible to
plan and implement the course; explain the objectives of the course, its scope, learning
outcomes to be achieved, assessment methods to be used and conduct lectures using the
appropriate delivery tools.

To facilitate student learning, the instructor develops & distributes the relevant study
materials to support the students’ learning in the course and prepare real life scenario case
studies with solutions. The instructor is also responsible to plan or participate in formal
examinations of students; prepare homework, assignments, assessment & other assessme
tools and conduct the necessary assessments in time in an objective manner.

Moreover, the instructor should strongly encourage class participation. Questions pertainin
to this course or relating to the accounting/finance/business field should also be welcomed
throughout the term. Class lectures will be focused on helping students understand the
“why’s” (the concept behind the mechanics) rather than the mere mechanics of the subjec
matter. The instructor should advise the student not to use memorization as a substitute fo
understanding.
 References

Text and reference books Arens, Elder and Beasley, Auditing and Assurance Service, Global Edition, 16th Edition, 2016

Hayes R., Wallage P., and Gortemake H., Principles of Auditing: An Introduction to
International Standards on Auditing, 3rd Edition, 2014

Handbook of International Quality Control, Auditing, Review, Other Assurance, and Related
Services Pronouncements (the handbook),2012.

Leung P., Coram P., et. all., Modern Auditing and Assurance Services, 6th Edition, Wiley 201

Messier. Glover, Prawitt, Auditing & Assurance Services, 9th Edition, with ACL software
McGraw-Hill ISBN: 978 125 9162343Louwers, T., Ramsay, (2012). Auditing & Assurance
Services (5th ed.). Boston, MA: McGraw‐Hill.

R. Whittington and K. Pany; Principles of Auditing & Other Assurance Services 19th Edition,
McGraw-Hill Irwin 2014

Timothy Louwers, Robert Ramsey, et. al., Auditing and Assurance Services (3rd ed.). Irwin
McGraw-Hill, 2008 (ISNB: 0-07-337936-0).

Slides, lecture note hand outand other materials provided in class