CHAPTER 1: AUDIT FRAMEWORK AND REGULATION
Concept of Audit & Assurance Engagements
- General Principles
- Development of assurance engagements
- Accountability, Stewardship and Agency
- Assurance Engagements
- 5 Elements of Assurance engagements
- Types of assurance engagement
- Levels of Assurance
- True and Fair & Reasonable Assurance
External Audit
- Regulatory Environment for External Audits
- Mechanisms for Regulating Auditors
- Appointment of the Auditor
- Auditor Removal
- Duties / Rights of the Auditor
- Limitations of external audits
- The development and status of ISAs
- The relationship between ISAs and national standards
Corporate Governance
- Corporate Governance & Auditing
- International Codes of CG (OECD)
- Good Corporate Governance
- Audit Committees
- Internal Controls & Risk Management
- Responsibilities for systems and controls
- Communicating with those charged with governance
Professional Ethics
- Fundamental Principles
- What is meant by a conceptual framework of accounting
- Threats
- Typical threats
- More threats
- Safeguards
- Independence & Confidentiality
CHAPTER 2: PLANNING AND RISK ASSESSMENT
Obtaining and accepting audit engagements
- Professional ethics and the new audit engagements
- Preconditions for an audit
- New engagement process
- Engagement letter
- Principles & Purpose
- Definitions for Quality Control
- Elements of a QC system
- Engagement Performance
- Assigning the Audit Team
- Individual level of Quality Control
Objective and General Principles
- Auditor Objectives
- Professional Scepticism and Judgement
Assessing Audit Risks
- Components of Audit Risk
- Affecting Audit Risk
- Materiality
Understanding the Entity And Its Environment
- How to get Initial Understanding
- Risk Assessment Procedures
- Risk assessment Procedures – sexy diagram
- Analytical Procedures in Planning
- Key ratios used in analytical procedures
Fraud, Laws and Regulations
- Definitions
- Fraud & Misstatement Effects
- Management and Auditor Responsibilities
- Investigating Misstatements
- Reporting Fraud and Error
- Responsibilities of management and auditors
Audit Planning and Documentation
- Why Plan an Audit?
- Contents of the Plan
- Audit Strategy vs Audit Plan
- Difference between Interim and Final audit
- Importance of Documentation
- Contents of Documentation
- Keeping Working Papers
CHAPTER : INTERNAL CONTROL
- Internal control systems
- Understanding the Controls
- The 5 components of Internal Control
The Use and Evaluation Of Internal Control Systems By Audito
- How Auditors Record Systems
- How Auditors Identify Deficiencies
- Evaluation of Internal Controls
Tests of Control
- Application & General IT controls
- Revenue (Sales Cycle)
- Purchases
- Payroll
- Inventory System continued
- Bank & Cash
- Capital expenditure
Communication on Internal Control
- Reporting on Internal Controls
- Management Letters
- The need for auditors to communicate with TCWG
Internal Audit and Corporate Governance
- Is there a need for Internal audit?
- Best practice for Internal Audit
- Internal v External Audit
Scope of Internal Audit
- Scope and limitations of Internal Audit
- Outsourcing
- Outsourcing internal audit
- Value for Money
- Best value assignments
- IT & Financial assignments
- Operational assignments
- Internal Audit Reports
CHAPTER: AUDIT EVIDENCE
Financial Statement Assertions And Audit Evidence
- The Assertions Explained
- Using Assertions
- Quality and Quantity of Evidence
- The relevance and reliability of audit evidence
Audit Procedures
- Procedures for obtaining evidence
- Analytical procedures
- Auditing Accounting Estimates
- Smaller Entity Evidence
- Control v Substantive Tests
Audit Sampling and Other Means Of Testing
- Definition & need
- Statistical or non-statistical?
- Methods of Sampling
- Misstatement or deviation
The Audit of Specific Items
- Receivables – The Assertions
- Receivables – Direct Confirmation
- Receivables – Other Evidence
- Receivables – Prepayments
- Revenues – Substantive procedures
- Inventory – and the Assertions
- Inventory – The Physical Count
- Inventory – Possible Count Weaknesses
- Inventory – Valuation
- Inventory – Cut-off
- Payables – Trade
- Payables – Accruals
- Payables – Provisions
- Payables – Non-current Liabilities
- Bank & Cash
- Non-current Assets – Tangible
- Non-current Assets – Intangible
- Share capital, reserves and directors’ emoluments
Computer-Assisted Audit Techniques
- Using CAATs
- The work of others
- Why Rely on Experts?
- Why Rely on Internal Audit?
- Using service organisations
- Not-for-profit organisations
- How is the Audit Different?
CHAPTER: REVIEW AND REPORTING
Subsequent events
- Purpose of a Subsequent Events Review
- Auditor responsibility for Subsequent Events
- Adjusting Events
- Adjusting Events – Diagram
Going Concern
- Going Concern Responsibilities
- The need for going concern reviews
- Going Concern Review & Indicators
- Going Concern Disclosures and Reporting
Written Representations
- Management Representations
Audit Finalisation and the Final Review
- Final Review
- Evaluation of Misstatements
Independent Auditor’s Report
- Structure of an Unmodified Audit Report
- Audit Opinion
- EOM and Other Matter Compared