STATUTORY AUDITING (ACCT 341)

OVERVIEW

1. COURSE DESCRIPTION

The syllabus for audit theory starts with an introduction to the nature and purpose of an audit, including the duties and liability of auditors, and the regulation that auditors must adhere to. The syllabus then covers the areas relating to the process of an audit of financial statements starting with audit planning and risk assessment, recording and evaluating internal control, as well as tests of controls, audit evidence, and the use of substantive procedures. The final section deals with audit completion including the audit report. 

2. REASON FOR THE COURSE

A statutory auditor must be able to demonstrate technical skills in auditing the financial statements in accordance with the International Standards on Auditing (CISAs). Therefore, program graduates will be auditing the financial statements prepared by the management to express a legal opinion on the financial statements whether they present fairly in all material respects and in accordance with the applicable financial reporting framework. 

3. STUDY HOURS

4. ROLE IN CURRICULUM

Auditing is the first course to introduce the fundamental knowledge on external audit processes for the bachelor of accounting and finance, building on existing financial accounting studies. 

Prerequisites: 
Students must have completed Financial Accounting 1 (ACCT 211) and Financial Accounting 2 (ACCT 212).

SKILLS

  • COURSE LEARNING OUTCOMES (CLO)
  • ASSESSMENT AND GRADING
  • TEACHING METHODS
  • STUDY PLAN
  • TEXTBOOKS AND REFERENCES

5. COURSE LEARNING OUTCOMES (CLO)

On successful completion of this course, students will be able to:

Knowledge Level of Learning Related
PLO
Explain the Principles of Internal Control (CK1)
Explain the principles of internal control and the features of information systems.		 Understand PC2
Describe Audit Procedures and Evidence (CK2)
Describe audit procedures and audit evidence required to meet the objectives of an audit and apply International Standards on Auditing (ISAs).		 Understand PC2
Cognitive Skills Level of Learning Related
PLO
Interpret the Regulatory Framework & Code of Ethics (CC1)
Interpret the purpose and scope of an audit and its regulatory framework as well as uphold the fundamental principles of the ACCA code of ethics and conduct to the duties of an auditor.		 Apply PC2
Assess Audit Risks (CC2)
Assess the audit risks by understanding the entity and its environment in order to plan for an audit		 Analyze PC2
Perform the Audit Completion Process (CC3)
Perform the audit completion process in order to form an audit opinion. 		Apply PC2
Communication, Information Technology, and Numerical Skills Level of Learning Related
PLO
Utilize Technology in the Audit Process (CCIT1)
Utilize Word software and spreadsheets to facilitate the preparation of learning papers on case studies, assignments, quizzes, and mock exams.		 Apply PCIT2
Interpersonal Skills and Responsibilities Level of Learning Related
PLO
Collaborate in Audit Simulation (CIP1)
Participate in a team to prepare audit programs for real entities and/or audit simulations.		 Create PIP1

6. ASSESSMENT AND GRADING

Grades will be determined based on a grading score, calculated using the following assessments and score allocations:

SKILL Assessment

Weighting

for Grade
Participation In-class tests Controlled Case Studies Simulation Final Exam
Explain the Principles of Internal Control (CK1)   20% 20%   60% 5%
Describe Audit Procedures and Evidences (CK2)      30% 35%  35% 20%
Interpret the Regulatory Framework & Code of Ethics (CC1)   30%  10%    60% 20%
Assess Audit Risks (CC2)    40%   30% 30% 25%
Perform the Audit Completion Process (CC3) 35%     65%   20%
Utilize Technology in the Audit Process (CCIT1) 15%      55% 30% 5%
Collaborate in Audit Simulation (PIP 1) 40%     60%   5%

7. TEACHING METHODS

This course is primarily lecture and assignment-based; assigned homework and in-class tests will support learning to material covered in class.  The class will be devoted to lectures, exercises, and in-class tests.

During the course, the following Course Outputs are required:

1 – Learning Paper on Controlled Case Studies: (CK1 CK2 CC1 CC2)
  Case Study no. 1 on Audit Planning and Risk Assessments
  Case Study no. 2 on Internal Controls and Audit Procedures
2 – Assignment: Audit Simulation (CK2 PK2 CC2 CC3 CCIT1 CIP1)
Work Group: Group
Output format: Presentation Slide and Working Papers
Language: English
Description:

Students will be assigned to participate in the audit simulation. They will be in charge of an audit engagement for a particular client and will be given a list of tasks to complete in each phase. They will start the engagement by understanding the client and its environment until the completion stage in which the auditor will issue an audit report. At the end of the term, students are required to do a presentation about their work from each phase, complete the peer assessment, and write a self-reflection about this simulation. Assignment Rubric

8. STUDY PLAN

The course targets the 50 lessons in the study plan below. Each lesson is 1.5 class hours each; there are a total of 75 class hours (excluding 3 hours of Final Review) The study plan below describes the learning outcome for each lesson, described in terms of what the student should be able to do at the end of the lesson. Readings should be done by students as preparation before the start of each class. Implementation of this study plan may vary somewhat depending on the progress and needs of students.

   Lesson Learning Outcomes Teaching and Learning Activities, Assessment
 1

Introduction

  1. Describe the course learning outcomes and assessment (CK1)
  2. Explain the nature of the audit, including the advantages and disadvantages of an audit. (CK1)
 Lecture
Discussion – Kahoot
Video
2

Business environment

  1. Explain the nature of the audit, including the advantages and disadvantages of an audit. (CK1)
  2. Explain the nature of accounting records. (CK1)
 Lecture Notes – Chapter 1
Demonstration of an audit report
Oral questions
HomeworkReading: Chapter 1 (Kaplan)
3

Business environment (continued)

  1. Explain the concept of true and fair presentation, and reasonable assurance. (CK1)
  2. Explain the regulations governing the appointment, removal and resignation of auditors. (CK1)
 Lecture Notes – Chapter 1
Demonstration of an audit report
Oral questions
QuizReading: Chapter 1 (Kaplan)
4

Auditors responsibilities

  1. Describe the responsibilities of directors. (CK1)
  2. Describe the duties/rights of auditors. (CK1)
 Lecture Notes – Chapter 2
Demonstration of director’s responsibilities – Kahoot
HomeworkReading: Chapter 4 (Kaplan)
5

Auditors responsibilities (continued)

  1. Explain the liabilities of auditors under contract and negligence to clients (CK1)
  2. Explain the liability of auditors to third parties (CK1)
 Lecture Notes – Chapter 2
Demonstration of
director’s responsibilities
QuizReading: Chapter 4 (Kaplan)
6

Audit regulation

  1. Explain the structure of auditing profession and the scope of ISA (CK1)
  2. Discuss the fundamental principles of professional ethics (CK1)
 Lecture Notes – Chapter 3
Discussion
Case Study
HomeworkReading: Chapter 2 (Kaplan)
Technical Paper
7

The ACCA Code of Ethics and Conduct

  1. Describe each of the ACCA fundamental principles of the code of ethics and conduct  (CK1)
 Lecture Notes – Chapter 3
Discussion – Kahoot
Didactic questioningReading: Chapter 2 (Kaplan)
8

The ACCA Code of Ethics and Conduct for Auditors

  1. Apply the ACCA code of ethics and conduct to professional appointment and conflicts of interest of an auditor  (CK1)
 Lecture Notes – Chapter 3
Discussion – KahootReading: Chapter 2 (Kaplan)
9

Audit regulation (continued)

  1. Describe the detailed requirements, and application of professional ethics (CK1)
 Lecture Notes – Chapter 3
Discussion – Kahoot
Drill & Practice
QuizReading: Chapter 2 (Kaplan)
10

Auditor appointment

  1. Explain the regulations governing the appointment, removal and resignation of auditors (CK1)
 Lecture Notes – Chapter 4
Discussion – Kahoot
Concept mapping
HomeworkReading: Chapter 3 (Kaplan)
11

Auditor appointment (continued)

  1. Explain how auditors obtain an initial understanding of the entity and its environment (CK2)
 Lecture Notes – Chapter 4
Discussion – Kahoot
Drill & Practice
QuizReading: Chapter 3 (Kaplan)
12

Risk assessment

  1. Explain the importance of audit evidence, including sufficient appropriate audit evidence (CK4)
 Lecture Notes – Chapter 5
Didactic questioning
Drill and practice
HomeworkReading: Chapter 5 (Kaplan)
Technical Paper
13

Risk assessment (continued)

  1. Identify the factors that influence the relevance and reliability of audit evidence (CK.4)
 Lecture Notes – Chapter 5
Didactic questioning
Drill and practice
KahootReading: Chapter 5 (Kaplan)
14

Risk assessment (continued)

  1. Define audit risk, including inherent risk, control risk and detection risk (CK2)
  2. Explain a risk-based approach to the audit (CK2)
 Lecture Notes – Chapter 5
Concept mapping
Case Study no. 1Reading: Chapter 5 (Kaplan)
15

Risk assessment (continued)

  1. Define the concept of materiality.(CK2)
  2. Explain how auditors obtain an initial understanding of the entity and its environment (CK2)
 Lecture Notes – Chapter 5
Concept mappingReading: Chapter 5 (Kaplan)
16

Risk assessment (continued)

  1. Define the concept of materiality.(CK2)
  2. Explain how auditors obtain an initial understanding of the entity and its environment (CK2)
 Lecture Notes – Chapter 5
Concept mappingReading: Chapter 5 (Kaplan)
17

Risk assessment (continued)

  1. Define the concept of materiality.(CK2)
  2. Explain how auditors obtain an initial understanding of the entity and its environment (CK2)
 Lecture
Concept mapping
QuizReading: Chapter 5 (Kaplan)
18

Audit planning

  1. Identify and explain the need for planning an audit (CK2)
  2. Identify and describe the contents of the overall audit strategy and the audit plan (CK2)
 Lecture Notes – Chapter 6
Discussion – Kahoot
Didactic questioning
HomeworkReading: Chapter 5,8,14 (Kaplan)
19

Audit planning (continued)

  1. Describe planning issues such as staffing (CK2)
  2. Explain the use of CAATs in audit including the use of audit software and test data (CCIP1)
 Lecture Notes – Chapter 6
Discussion – Kahoot
Didactic questioning
Drill and practiceReading: Chapter 5,8,14 (Kaplan)
Technical Paper
20

Audit planning (continued)

  1. Explain the purpose and contents of the current file and the permanent file (CK4)
 Lecture Notes – Chapter 6
Concept mapping
Compare and contrastReading: Chapter 5,8,14 (Kaplan)
21

Audit planning (continued)

  1. Explain the quality control procedures that should exist over the review of audit working papers (CK4)
 Lecture Notes – Chapter 6
Discussion – Kahoot
Didactic questioning
Drill and practice
HomeworkReading: Chapter 5,8,14 (Kaplan)
22

Audit planning (continued)

  1. Define audit sampling and identify the sampling methods (CK4)
  2. State the main factors affecting sample sizes (CK4)
 Lecture Notes – Chapter 6
Discussion – Kahoot
Didactic questioning
Drill and practiceReading: Chapter 5,8,14 (Kaplan)
Technical Paper
23

Audit planning (continued)

  1. Define audit sampling and identify the sampling methods (CK4)
  2. State the main factors affecting sample sizes (CK4)
 Lecture Notes – Chapter 6
Didactic questioning
Drill and practice
QuizReading: Chapter 5,8,14 (Kaplan)
24

nternal control evaluation

  1. Describe the five components of an internal control system. (CK3)
  2. Describe the objectives of an internal control (CK3)
 Lecture
Discussion – KahootReading: Chapter 7
Technical Paper
25

nternal control evaluation (continued)

  1. Describe the techniques used by auditors to understand, record accounting systems including narrative notes and flowcharts. (CK4)
  2. Describe the techniques used by auditors to evaluate accounting systems including internal control questionnaires (ICQs), internal control evaluation questionnaires (ICEQs) and checklists. (CK4)
 Lecture Notes – Chapter 7
Didactic questioning
Discussion – KahootReading: Chapter 6 (Kaplan)
26

Internal control evaluation (continued)

  1. Describe the inherent limitations of an internal control system. (CK3)
  2. Evaluate the internal control system. (CCI1) & (CIP1)

 

 Lecture Notes – Chapter 7
Didactic questioning
Discussion – KahootReading: Chapter 6 (Kaplan)
27

Internal control evaluation (continued)

  1. Describe the inherent limitations of an internal control system. (CK3)
  2. Evaluate the internal control system. (CCI1) & (CIP1)
 Lecture Notes – Chapter 7
Didactic questioning
Discussion
QuizReading: Chapter 6 (Kaplan)
28

Tests of control: income and expenditures cycles

  1. Describe and illustrate control procedures to meet specified objectives and explain the testing of controls of purchases and trade payables (CK4)
 Lecture Notes – Chapter 8
Didactic questioning
Demonstration
HomeworkReading: Chapter 7 (Kaplan)
29

Tests of control: income and expenditures cycles (continued)

  1. Describe and illustrate control procedures to meet specified objectives and explain the testing of controls of sales and trade receivables.  (CK4)
 Lecture Notes – Chapter 8
Didactic questioning
DemonstrationReading: Chapter 7 (Kaplan)
30

Tests of control: income and expenditures cycles (continued)

  1. Describe and illustrate control procedures to meet specified objectives and explain the testing of controls of wages and salaries. (CK4)
 Lecture Notes – Chapter 8
Drill & Practice
Quiz
Case Study no. 2Reading: Chapter 7 (Kaplan)
31

Analytical procedures and estimates

  1. Describe procedures used by auditors to obtain audit evidence, including analytical procedures (CK4)
 Lecture Notes – Chapter 10
Compare and contrast exercise
HomeworkReading: Chapter 9 (Kaplan)
Technical Paper
32

Analytical procedures and estimates (continued)

  1. Describe audit testings over accounting estimates (CK4)
 Lecture Notes – Chapter 10
QuizReading: Chapter 9 (Kaplan)
33

Non-current assets

  1. Explain the importance of the use of assertions (CK2)
  2. Explain the assertions in relation to classes of transactions, account balances, and presentation and disclosure (CK2)
 Lecture Notes – Chapters 10, 11
Discussion – Kahoot
HomeworkReading: Chapters 7, 10 (Kaplan)
34

Non-current assets (continued)

  1. Describe procedures used by auditors to obtain audit evidence, including inspection, observation, external confirmation, recalculations, reperformance, analytical procedures and inquiry (CK4)
 Lecture Notes – Chapters 10,11
Discussion – KahootReading: Chapters 7, 10 (Kaplan)
35

Non-current assets (continued)

  1. Explain the rationale for designing audit programmes by reference to audit procedures (CCI2)
 Lecture Notes – Chapters 10, 11
Discussion – KahootReading: Chapters 7, 10 (Kaplan)
36

Non-current assets (continued)

  1. Explain the rationale for designing audit programmes by reference to audit procedures (CCI2)
 Drill and Practice
QuizReading: Chapters 7, 10 (Kaplan)
37

Inventories

  1. Explain why the audit of inventory is often an area of high inherent risk (CK2)
  2. Describe the audit procedures that should be undertaken before, during, and after attending an inventory count (CK4)
 Lecture Notes – Chapters 9,12
Video
Concept mapping
HomeworkReading: Chapters 7, 11 (Kaplan)
38

Inventories (continued)

  1. Describe the extent to which an auditor may rely on a system of perpetual inventory (CK4)
 Lecture Notes – Chapters 9,12
Discussion – KahootReading: Chapters 7, 11 (Kaplan)
39

Inventories (continued)

  1. Explain the substantive procedures to meet the specific objectives for the audit of inventory (CK4)
 Lecture Notes – Chapters 9,12
Discussion – KahootReading: Chapters 7, 11 (Kaplan)
40

Inventories (continued)

  1. Explain the substantive procedures to meet the specific objectives for the audit of inventory (CK4)
 Lecture Notes – Chapters 9,12
Drill & Practice
QuizReading: Chapters 7, 11 (Kaplan)
41

Accounts receivable and cash

  1. Explain the substantive procedures used in auditing each of the following: 
    1. Trade receivable, prepayments and other receivables
    2. Bank and Cash (CK4)
 Lecture Notes – Chapters 9,13
HomeworkReading: Chapters 7, 12 (Kaplan)
42

Accounts receivable and cash (continued)

  1. Explain the substantive procedures used in auditing each of the following: 
    1. Trade receivable, prepayments and other receivables
    2. Bank and Cash (CK4)
 Lecture Notes – Chapters 9,13
Discussion – KahootReading: Chapters 7, 12 (Kaplan)
43

Accounts receivable and cash (continued)

  1. Explain the substantive procedures used in auditing each of the following: 
    1. Trade receivable, prepayments and other receivables
    2. Bank and Cash (CK4)
 Lecture Notes – Chapters 9,13
Drill & Practice
QuizReading: Chapters 7, 12 (Kaplan)
44

Liabilities

  1. Explain the substantive procedures used in auditing each of the following: 
    1. Trade payables, accruals and other payables (CK4)
 Lecture Notes – Chapter 9,14
Discussion – Kahoot
HomeworkReading: Chapter 7, 13 (Kaplan)
45

Liabilities (continued)

  1. Explain the substantive procedures used in auditing each of the following:
    1.  Non-current liabilities  (CK4)
 Lecture Notes – Chapter 9,14
Discussion – KahootReading: Chapter 7, 13 (Kaplan)
46

Liabilities (continued)

  1. Explain the substantive procedures used in auditing each of the following:
    1. Provision (CK4)
 Lecture Notes – Chapter 9,14
Drill and practice
Quiz
Case Study no. 2Reading: Chapter 7, 13 (Kaplan)
47

Forming an audit judgement

  1. Define and discuss the significance of going concern and discuss indicators of going concern problems (CK2)
 Lecture Notes – Chapter 15
Didactic questioning
HomeworkReading: Chapter 15 (Kaplan)
48

Forming an audit judgement (continued)

  1. Explain the procedures to be applied in performing going concern reviews (CK4)
  2. Explain the purpose of written representation and describe the circumstances where they are necessary (CK4)
 Lecture Notes – Chapter 15
Drill & Practice
QuizReading: Chapter 15 (Kaplan)
49

The external audit opinion

  1.  Describe the form and content of unmodified audit reports. (CK5)
 Lecture Notes – Chapter 16
Discussion – Kahoot
HomeworkReading: Chapter 16, 17 (Kaplan)
Technical Paper
50

The external audit opinion (continued)

  1. State the circumstances where an auditor should issue a modified audit report (CK5).
 Lecture Notes – Chapter 16
Drill & Practice
QuizReading: Chapter 16, 17 (Kaplan)
                                    Total Hours : 75 hours

9. TEXTBOOKS AND REFERENCES

Textbooks

  1. Kaplan Publishing, FAU Foundation in Audit*
  2. BPP Learning Media, Practice & Revision Kit Paper FAU Foundation in Audit*

References

  1. BPP Learning Media, Interactive Tex on FAU Foundation in Audit*
  2. Kaplan Publishing, Practice & Revision Kit Paper FAU Foundation in Audit*                 
  3. International Standards on Auditing

*latest applicable version

Education Resources