PAPER NO. 6 UDITING AND ASSURANCE |
GENERAL OBJECTIVE |
| To equip the candidate with knowledge of the audit process |
4.0 SPECIFIC OBJECTIVES |
A candidate who passes this paper should be able to:
- Explain the principles of auditing
- Discuss the legal and professional environment of an audit
- Design and develop an audit plan, programme and working papers
- Design and implement audit procedures
- Perform an audit in a computerised environment
- Prepare and interpret various audit reports
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CONTENT |
6.1 Nature, purpose and scope of the audit
- Audit as an assurance engagement
- Distinction between auditing and accounting
- Audit strategies
- Users of audited financial statements and auditors report
- Advantages and disadvantages of an audit
- Types and timing of audits
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6.2 Legal and professional framework
- Provisions of the Companies Act (appointment, qualification, rights, duties ans dismissal of auditors)
- Professional ethics for auditors (the role of ICPA, professional competence and due care, independence of opinion, acting with sufficient expertise, objectivity and integrity, disclosure and non-disclosure of information)
- Role of international standards on auditing (ISAs)
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6.3 Client acceptance procedures
- Background information about the client
- Client acceptance and retention
- Professional etiquette
- Engegement letter
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6.4 Conduct of an audit
- Developing an audit plan and audit programme
- Reviewing the accounting system and internal control system and errors and frauds
- substantive procedures on financial statement items
- Documentation of the audit
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6.5 Audit evidence
- Nature and sources of audit evidence
- Types of audit evidence
- Techniques of gathering audit evidence
- Limitations in gathering audit evidence
- Types of audit tests
- Audit sampling
- Using the work of experts
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6.6 Audit review
- Going concern
- management representations
- Post balance sheet events and subsequent events
- Management letter
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6.7 Auditor's use of the computer
- Benefits and drawbacks of computerised accounting systems
- Ways in which the auditors can use computers in the audit
- Internal controls in a computerised acounting system
- Auditors approach, auditing around and through the computer
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6.8 Auditor's report
- Purpose of auditor's report
- Contents and elements of auditors' report
- Types of audit report
- Consequences of various audit reports
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