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Auditing I Course Outline

This course outline describes an Auditing Principles and Practices course. The course focuses on conceptual, theoretical, and practical aspects of auditing financial statements based on international auditing standards. It covers topics such as the audit profession, planning audits, assessing risks, internal controls, gathering evidence, and issuing audit reports. The course objectives are to understand the nature of audits and standards, assess risks, evaluate internal controls, and demonstrate audit procedures. Students will be evaluated based on projects, a midterm exam, and a final exam.

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320 views3 pages

Auditing I Course Outline

This course outline describes an Auditing Principles and Practices course. The course focuses on conceptual, theoretical, and practical aspects of auditing financial statements based on international auditing standards. It covers topics such as the audit profession, planning audits, assessing risks, internal controls, gathering evidence, and issuing audit reports. The course objectives are to understand the nature of audits and standards, assess risks, evaluate internal controls, and demonstrate audit procedures. Students will be evaluated based on projects, a midterm exam, and a final exam.

Uploaded by

brook buta
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ST MARY’S UNIVERSITY

FACULTY OF ACCOUNTING AND FINANCE


COURSE OUTLINE
Course Title: Auditing Principles and Practices I
Course No.: Acct 401
Credit Hours: 3
Prerequisite: Acct 302
Status of Course: Major
Delivery Time: Year III Semester I
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 international 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 Standards (ISAs), professional
ethics and legal liability issues for auditors. Next is a discussion that helps 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.

COURSE OBJECTIVES
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.
 Demonstrate ability in the use of International Auditing Standards in various audit 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 accordance 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 audit
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 CONTENTS
CHAPTER 1. The Nature, Purpose, Scope of Audit and Assurance Services
 Meaning Of Audit
 Assurance Services: Overview
 Why Audits are Conducted
 Types of Audit and Auditors
ISA Reference(s)
 IAASB framework
 ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in
Accordance with International Standards on Auditing
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CHAPTER 2. The Auditing Profession
 The Regulatory Framework Governing Auditing
 International Standards on Auditing (ISA)
 Professional Ethics: Fundamental Principles, Threats and Safeguards
 Legal Liability of Auditors
 Rights and Duties, Appointment, Dismissal and Resignation of an Auditor
ISA Reference(s)
 ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in
Accordance with International Standards on Auditing
 ISA 250, Consideration of Laws and Regulations in an Audit of Financial Statements
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CHAPTER 3. Materiality and Risk Assessment
 Audit Risk
 Materiality
ISA Reference(s)
 ISA 320, Materiality in Planning and Performing an Audit
 ISA 330, The Auditor's Responses to Assessed Risks

CHAPTER 4. Client Acceptance and Planning the Audit


 Client Acceptance and Continuance
 Planning the Audit
 Appointment, Remuneration, and Removal of Auditors
ISA Reference(s)
 ISA 210, Agreeing the Terms of Audit Engagements
 ISA 300, Planning an Audit of Financial Statements
 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 Audit
 ISA 330, The Auditor's Responses to Assessed Risks
 ISA 520, Analytical Procedures
 ISA 550, Related Parties

CHAPTER 5. Audit Responsibility, Objectives, Evidence and Recording the


Audit
 Audit Responsibility
 Management Assertions
 Audit Objectives
 Audit Evidence
 Audit Documentation
ISA Reference(s)
 ISA 240, The Auditor's Responsibilities Relating to Fraud in an Audit of Financial
Statements
 ISA 250, Consideration of Laws and Regulations in an Audit of Financial Statements
 ISA 260, Communication with 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

2
CHAPTER 6. Internal Control
 Meaning and Objectives
 The Basic Elements
 Recording Internal Control System
 Internal Control and External Auditor
 Internal Control and Internal Auditor
 Inherent Limitations

ISA Reference(s)
 ISA 260, Communication with Those Charged with Governance
 ISA 265, Communicating Deficiencies in Internal Control to Those Charged with
Governance and Management
 ISA 315, Identifying and Assessing the Risks of Material Misstatement through
Understanding the Entity and Its Environment

CHAPTER 7. Audit Reports


 Types of Audit Reports
 Basic Contents of a Standard Audit Report
 Audit Opinion
ISA Reference(s)
 ISA 700, Forming an Opinion and Reporting on Financial Statements
 ISA 705, Modifications to the Opinion in the Independent Auditor's Report
 ISA 706, Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent
Auditor's Report
 ISA 710, Comparative Information-Corresponding Figures and Comparative Financial
Statements
 ISA 720, The Auditor's Responsibilities Relating to Other Information in Documents
Containing Audited Financial Statements

REFERENCES
 Arens, A. A., Elder, R. J., Beasley, M. S., & Hogan, C. E. (2017). Auditing and
assurance services an integrated approach. 17th edition .Boston, MA: Pearson.
 Arens, A. A., Elder, R. J., Beasley, M. S., & Hogan, C. E. (2016). Auditing and
assurance services. 16th edition .Boston, MA: Pearson.
 Whittington, R., & Pany, K. (2016). Principles of auditing & other assurance
services. 20th edition . New York: McGraw-Hill Education.
 Hayes R., Wallage P., and Gortemake H., Principles of Auditing: An Introduction to
International Standards on Auditing, 3rd Edition, 2014
 2018 Handbook of International Quality Control, Auditing, Review, Other Assurance, and
Related Services Pronouncements: Volume I, II & III (the handbook).

Evaluation Item Points


Project work 20%
Midterm exam 30%
Final Exam 50%

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