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SEMESTER NOVEMBER 2014

Department

Accounting and Finance

Course Title

Audit II

Course Code

DAC 2163

Semester Taught

Semester 4 Year 2

COURSE TOPIC OUTLINE

Hours

1

CODE OF ETHICS FOR AUDITORS
 Fundamental principles of ethics and professional conduct in
accordance to MIA By-Law
 Importance of professional ethics
 Concepts of independence and its importance
 Situation that can influence independence in appearance and in
fact
 Advertising and other methods to attract customer
 Amounts of fees that can be charged

3

2

LIABILITY OF AUDITORS
 Liability under the Companies Act
 Liability under Common Law
 Breach of contract and negligence

3

3

MATERIALITY AND AUDIT RISK
 Concepts of audit risk and materiality
 Materiality in accounting and auditing
 Control risk, inherent risk and detection risk
 Relationship of materiality and audit risk
 Standards and guidelines
 Quantitative level and basis that can be used for valuing
materiality

6

statistical sampling  Fundamental concepts of sampling  Sampling risk and non-sampling risk  Statistical sampling o Concepts o phrase  Sampling procedure o Statistical o Non-statistical  Test of control : attribute sampling 5.  Factors influencing determination of materiality Application of audit risk model to audit work 4 EFFECTS OF POST-BALANCE SHEET EVENTS  Types of post-balance sheet events  Impact of events on audit report  Additional evidence in relation with contingency and commitments  Going concern concept  Accounting estimates  Management and auditors’ responsibility 3 5 GROUP AUDIT  Planning and administration for group audit  Specific issues in group audit o Principal auditor o Compliance of Internal Auditing and Accounting Standards o Related party transactions o Goodwill on consolidation o Letter of support  Audit report for subsidiaries  Company’s Act 3 6 USING THE WORK OF OTHERS  Work of other auditors  Work of expert  Work of internal auditor 3 7 INTRODUCTION TO SAMPLING  Judgmental vs.5 .

 Test of substantive : monetary unit sampling / probability proportionate sampling 8 COMPUTERISED INFORMATION SYSTEM (CIS)  Audit objective and scope of work in a computerized environment  Internal control in CIS surrounding  Auditor’s evaluation on internal control system  Auditing through or around the computer  Computer Assisted Auditing Technique (CAATs) o Nature and types of CAATs o Consideration in using CAATs o Auditing software that can be used o Test of data o Parallel simulation 9 INTERNAL AUDITING  Development of internal audit  Objectives. scope and responsibility of internal auditor  Similarities and differences between internal and external audit  Operational audit & compliance o Concepts of operational audit o Objectives and scope o Identifying criteria to evaluate performance 3 1 0 AUDIT RELATED SERVICES  Auditor’s report to audit special circumstances  Assurance level for related services  Agreed upon procedures  Compilation  Review of financial information 3 11 OTHER SERVICES  Consultation  Secretarial services  Due diligence review  Forensic accounting / auditing  Taxation 3.5 3 .

1 2 CURRENT ISSUES IN AUDITING  Corporate governance / audit committee  Audit of SMEs  Other relevant issues 3 Total 42 .