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LEARNER GUIDE

2017

FACULTY OF ACCOUNTING AND INFORMATICS

DEPARTMENT OF AUDITING AND TAXATION

QUALIFICATION: BACHELOR OF TECHNOLOGY


INTERNAL AUDITING

BT IAU 2

INTERNAL AUDITING 4
(IAUD 401)
Module 1: IAUD 411

And

Module 2: IAUD 421

REVISED JANUARY 2017


REVISED BY: MR A SEETHARAM
CONTENTS PAGE
DEPARTMENTAL INFORMATION 2
WELCOME AND INTRODUCTION 3
INTRODUCTION TO THE SUBJECT 3
LEARNING OUTCOMES AND ASSESSMENT CRITERIA 4
LEARNING AND TEACHING STRATEGIES 4
COPYRIGHT AND PLAGIARISM 6
STUDENT SUPPORT 6
WORK INTEGRATED LEARNING, INDUSTRY, COMMUNITY AND 7
OCCUPATION-RELATED INFORMATION
QUALITY ASSURANCE AND ENHANCEMENT 8
TEST DATES 8
MODULE 1 - CORE SYLLABUS 9
MODULE 1 SCHEME OF WORK 12
MODULE 2 CORE SYLLABUS 13
MODULE 2 SCHEME OF WORK 15
ATTACHMENTS
CAREER PATH

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DEPARTMENTAL INFORMATION

DEPARTMENT : Auditing and Taxation


(Ritson Campus)

LECTURER : Mr A Seetharam CA(SA); FIIASA, CIA


Telephone: (031) 373 6753
Email: avineshs@dut.ac.za

HEAD OF DEPARTMENT : Mr D Reddy CA(SA)


Telephone: (031) 373 6781
Email: divakaranr@dut.ac.za

DEPARTMENT SECRETARY : Mrs Phumzile Khumalo


Room R4-227
Telephone: (031) 373 5610
Fax: (031) 373 5601
Email: phumzilem1@dut.ac.za

LECTURES : 3 periods per week

TUTORIAL SESSIONS : 1 period per week

STUDENT CONSULTATION : To be confirmed.

LECTURE VENUE : To be confirmed.

TUTORIAL VENUE : To be confirmed.

DURATION OF COURSE

Module 1 IAUD411 : Semester 1 (21 weeks)

Module 2 IAUD421 : Semester 2 (19 weeks)

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DEPARTMENT OF AUDITING AND TAXATION

1. Welcome and Introduction

1.1 Dear Student


The Department of Auditing and Taxation welcomes you as a student in Internal
Auditing 4 (Module 1 and 2).
Read the information in this learner guide and make sure you have it at hand at all times,
since you will frequently need to refer to it during the year.

1.2 The learner guide assists the students with:


Subject content to be covered,
Preparing for lectures,
Self-study, and
Learning outcomes, assessment criteria and assessment strategies.

2. Introduction to the subject

2.1 The course covers an integrated and practical approach of the entire audit process
which entails the planning, executing and finalisation of audits. It also covers
governance, risk management, and controls.
The course requires of students to integrate their knowledge, gained from the current and
prior years, from Financial Accounting, Cost and Management Accounting, Taxation
and Company Law.

2.2 Pre-Requisites

The pre-requisites for this course are:


Internal Auditing 3 (Module 1 and Module 2).
In addition, a thorough knowledge of the audit process, business processes, risks and
controls (e.g.: The Revenue and Receipts process, risks and controls) studied in
prior years is essential for this course.

The following is expected of students in addition to formal lectures:


Obtain an overview of specific lecture content prior to each lecture.
Prior reading of the specific lecture content before attending each lecture.
Participation in lecture discussions.
Apply critical thinking with regard to problem solving.
Integrate knowledge of other subjects covered in your programme.
Tutorials are compulsory and must be completed before the tutorial sessions.
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2.3 Recognition of Prior Learning (RPL)
None.

3. Learning Outcome and Assessment Criteria

To provide students with a holistic view of the subject matter and to apply it in an
integrated and practical manner.
To provide students with a degree of responsibility and autonomy in the application
of the fundamental concepts.

3.1 Specific Outcomes

After having completed this course, the student should have an understanding of and
be able to:
Use the audit process to perform an audit from start to end for assurance and
consulting engagements.
Evaluate and improve on risk management, control and governance processes.
Identify, categorise and communicate audit findings.

3.2 Assessment Criteria

This specifies the evidence and the qualities of the performance which must be
demonstrated to achieve an outcome.
Simply stated, they are the standards and activities by which students can prove
that they have achieved a specific outcome at the end of a learning period.
For this course, the method of assessments is:
o Tests and
o Exams.

4. Learning and Teaching Strategies


4.1 Lectures and Tutorials

Formal lectures are an essential component of this course. Therefore, attendance


at lectures is important.
Students will be given tutorials and the suggested solutions in advance, i.e.: prior
to the related topics being covered at lectures in class. Students are expected to
attempt the tutorials prior to attending the tutorial class. Tutorials provide a
student with an opportunity to share views and discuss problems with the lecturer
and fellow students.

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Student participation is of utmost importance to obtain maximum benefit of
tutorials.

Tutorials are compulsory and the following process must be followed by students in
order to ensure success in this course:
The text book material together with the lecture content must be studied in detail
prior to attempting the tutorials.
Tutorial questions must be answered under exam conditions prior to the tutorial
sessions. The answers should be marked using the suggested solutions and further
learning should take place from shortcomings identified. Problematic areas must
be highlighted by students and brought to the attention of the lecturer during the
tutorial session. Students would now be prepared for the tutorial sessions.
The tutorial sessions would be used to discuss problematic areas that were identified
by students. Note that, the tutorial sessions are not for students to do tutorials in
the class, neither is it for the lecturer explain the entire tutorial without any
attempts made by students. Tutorials must be done by students in their own time
prior to each tutorial session.

The above strategy for success is based on the following quote:


Mistakes increases your experience, and experiences decreases your mistakes.
If you learn from your mistakes, then others learn from your success!
Author unknown.

4.2 Graduate Attributes


To provide students with sufficient knowledge to apply in the work place.

4.3 Assessment Criteria

The final mark is calculated as follows:


- Examination mark 60%
- Course mark (DP) 40%
- Final mark 100%

The examination consists of one, three-hour paper which shall constitute 60% of
the final mark.
Two tests will be written, and an average mark of the two tests will count as a
course mark for DP purposes. It must be noted that these tests are compulsory.
To be admitted to the examination, the student must earn a course mark of at least
40%.

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Students must obtain a combined course and examination mark of not less than
50% to pass the subject.
A student fails if he/she does not achieve the sub-minimum of 40% for the
examination paper, despite the fact that the combined mark is 50% or more.
Apologies for not writing tests will only be accepted by the submission of either an
original medical certificate or a letter from the students employer (for work
commitments) within 48 hours of the test being written. Only in these
circumstances the student will be given an opportunity to write an Aegrotat test
which will serve as a replacement test mark for either test 1 or test 2 mentioned
above. The course mark is calculated in the same manner mentioned above.
It must be noted that, if a student is unable to write test 1 and test 2 mentioned
above, only one Aegrotat test will be written. This will only represent one test
mark of the two compulsory tests referred to above. Therefore, the other test will
count as a zero mark for the calculation of the average course mark for DP
purposes.
Students will receive feedback on their performance of tests and a post mortem of
each test will be conducted, so that students are able to identify their shortcomings
and take corrective action going forward. Refer to the At risk students section
below for more detail.

Note:
It must be noted that the success of a student will be determined by how well he or she
applies the theoretical knowledge in an integrated and practical manner. It is
therefore important to apply a holistic and practical view when studying this course.

5. Copyright and Plagiarism

Plagiarism is defined as copying the work or material developed by another and


presenting the same as your own. Plagiarism will not be accepted under any
circumstances.

6. Student Support
6.1 At Lectures:
Lectures will be interactive were time will be allocated for students to ask questions on
material discussed.

6.2 Consultation Times:


Students can also consult with the lecturer during consultation times which would be
confirmed when lectures commence. The purpose of consultation sessions is to assist
students with any queries that they may have. Students must adhere to consultation

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times, unless prior arrangements are made with the lecturer to meet outside of the
consultation times.

6.3 At Risk Students:


At risk students are defined as students that may not pass their assessments which
may result in not passing the course.
These students are identified and communicated to. Students are requested to identify
improvement areas/ plans for further assessments.
They are also requested to discuss their improvement plans with the lecturer for
further advice on improving their future assessments.

7. Work Integrated Learning (WIL), Industry, Community, and Occupation-related


Information.

The programme does not have a Work Integrated Learning component. The Department,
however, engages and invites potential employers within the field of Internal Auditing to
conduct recruitment drives on campus. However, the department does not guarantee
students employment from these initiatives. Further, students are advised to liaise with
the Co-operative Education Department, during the course of their study, to source
potential employers.

Internal Auditing is taking an increasing importance in commerce and industry due to


large corporate failures, fraud, etc. The King IV report on Corporate Governance has
emphasized the importance of the role of Internal Auditing in an organization with a
view to ensuring a transparent, fair and ethical conduct by companies.

This has resulted in tremendous opportunities for students in the field of Internal
Auditing. Refer to the attached career path information in the field of internal auditing.

An important professional body to contact for further information on this discipline is


the Institute of Internal Auditors (IIA).

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8. Quality Assurance and Enhancement

Constructive student feedback is essential for quality assurance and enhancement.


Student feedback will be elicited as follows:
Student discussions,
Student representatives feedback to lecturer and HOD, and
Student surveys entailing an evaluation of the subject and the lecturer are
conducted.
Where applicable, feedback would be provided during lectures.

9. Test Dates

Modules Test week 1 Test week 2


Module 1 3 10 March 2017 21 28 April 2017
Module 2 18 25 August 2017 2 9 October 2017

Note:
The contents in this learner guide may be subject to change. Should there be any
changes these will be communicated during lectures.

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INTERNAL AUDITING 4 MODULE 1 (IAUD 411)

APPENDIX 1
Learning outcomes Assessment criteria Assessment
Methods
Exit level outcomes Unit 2 x 90 minute
1a Internal Audit tests, and
Management 1 x 3 hour written
Specific outcomes a) Understand and apply the responsibilities in terms of examination
(Element la.1) the Standards for the Professional Practice of Internal
Establish an Internal Auditing.
Audit Department. b) Prepare a Functions and Responsibility Statement
according to the Standards for the Professional
Practice of Internal Auditing.
c) Prepare Job Descriptions for all levels of internal
auditors (Chief Audit Executive, Senior Audit
Manager, Audit Manager, Senior auditor, auditor,
junior auditor) according to the Standards for the
Professional Practice of Internal Auditing.
d) Develop audit manuals for the conduct of internal
audit assignments according to the Standards for the
Professional Practice of Internal Auditing.
e) Establish a marketing plan for the Internal Audit
Activity.
f) Understand and apply the principles and concepts
underlying the Outsourcing of internal audit.
g) Establish a Quality Assurance Plan for the internal
audit activity according to the Standards for the
Professional Practice of Internal Auditing.
h) Establish a policy document for the recruitment and
appointment of internal audit personnel.
i) Establish a policy document for the professional
development of internal audit staff according to the
Standards for the Professional Practice of Internal
Auditing.
j) Establish short, medium and long term planning
schedules for the internal audit activity according to
the Standards for the Professional Practice of internal
Auditing
k) Apply basic personnel management skills

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INTERNAL AUDITING 4 MODULE 1 (IAUD 411)

Learning outcomes Assessment criteria Assessment


Methods
Specific outcomes a) Establish/ Prepare project budgets according to the
(Element 1 a.2) Standards for the Professional Practice of Internal
Apply management Auditing.
principles to the b) Establish/ Prepare project schedules according to the
management and Standards for the Professional Practice of Internal
controlling of Internal Auditing.
Audit c) Prepare progress reports of audit projects according to
assignments/projects. the Standards for the Professional of Internal
Auditing:
d) Understand and apply basic supervisory activities in all
phases of internal audit work:
Engagement planning (2200)
Performing the engagement (2300)
Communicating results (2400)
Monitoring progress (2500)
Resolution of managements acceptance of risks
(2600)
Exit level outcomes Unit
lb Specialist Audit
Assignments
Specific/outcomes a) Understand and apply the definition of fraud
(Element 1b.1) b) Advise on and explain why fraud happens
Perform and manage fraud c) Advise on and understand who is responsible for
/ forensic audits. detecting and deterring fraud
d) Advise on and establish a Corporate Fraud Policy
e) Understand and apply the principles and the
methodology in detecting fraud
f) Determine the exposures risks of the business to fraud
in all relevant functional areas:
Sales & Debtors
Purchasing & Creditors
Inventory
Payroll
Long-term and short-term assets and liabilities.
g) Understand and advise on the symptoms of fraud
h) Investigate and report instances of fraud
Specific outcomes a) Understand, apply and manage the principles and
(Element lb.2) concepts of Government audits in line with the
Perform and manage Standards for the Professional Practice of Internal
audits of Government and Auditing.
Non-profit Organizations b) Understand, apply and manage the principles and
concepts of the audit of Non Profit Organizations in
line with the Standards for the Professional Practice
of Internal Auditing.
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INTERNAL AUDITING 4 MODULE 1 (IAUD 411)

Learning outcomes Assessment criteria Assessment


Methods
Specific outcomes a) Understand and manage the principles and concepts
(Element lb.3) of specific performance measures and frameworks in
Perform and manage line with the Standards for the Professional Practice
audits of Performance of Internal Auditing.
Measures and related
frameworks.

Specific outcomes a) Understand and apply the principles and concepts of


(Element lb.4) Environmental Auditing in line with the Standards for
Perform and manage the Professional Practice of Internal Auditing.
Environmental Audits.

Specific outcomes a) Understand and mange the principles and concepts of


(Element 1 b.5) Treasury Audits in line with the Standards for the
Perform and manage Professional Practice of Internal Auditing.
Treasury Audits.

Specific outcomes a) Understand and apply the principles and concepts of


(Element 1b.6) Value for Money audits (Operational Audits) in line
Perform and manage with the Standards for the Professional Practice of
Value for Money audits Internal Auditing.
(Operational Audits)

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INTERNAL AUDITING 4 MODULE 1 (IAUD 411)

Scheme of Work
Sections Outcome Reference Text Reference
Establish an Internal Audit Element ISPPIA 1000, 1100, Chapter 1, 2, 9
Department / Activity 1a.1 1200, 1300, 2000,
2100
King Report on
Corporate
Governance

Management and Element ISPPIA 2200, 2300. Chapter 2, 10, 11, 12


Controlling of Internal 1a.2 2400, 2500, 2600
Audit Assignment/ Projects

Perform and manage value Element Notes from IA3


for money audits 1b.6
(Operational Auditing)
Perform and manage Element Public Finance and
Treasury Audits 1b.2, 5 Management Act
(PFMA), 1999.
Specialist audit
assignments
Fraud and Forensic Element Chapter 8
Auditing 1b.1
Perform and manage Element
Audits and Performance 1b.3
Measures and related
frameworks

Prescribed Reading:
The following book is compulsory for this course:
Internal Auditing: Assurance and Advisory Services 3rd edition, By Reding, Sobel,
Anderson, Head, Ramamoorti, Salamasick, and Riddle.

Recommended Reading:
Internal Auditing:An Introduction4th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant.
Performing Internal Audit Engagements 4th Edition, P Coetzee, R du Bruyn, H Fourie,
K Plant.
Advanced Internal Audit Topics 4th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant.

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INTERNAL AUDITING 4 MODULE 2 (IAUD421)

APPENDIX 2
Learning outcomes Assessment criteria Assessment
methods
Unit 1c 2 x 90 minute tests,
Corporate Governance, and
Risk Management, 1 x 3 hour written
Internal Control and examination
Internal Control
evaluation
Specific outcomes for a) The concepts and principles relevant to assessing
unit 1c.1 governance are explained and applied in accordance
Describe, apply and. with the principles set out in the King Report on
advice on the objectives, Corporate Governance.
nature and evaluation of b) The concepts and principles relevant to risk
Risk Management, management are explained and applied in line with
Governance and Internal the Standards for the Professional Practice of Internal
Control. Audit
c) The concepts and principles relevant to assessing risk
are explained and applied in accordance with the
Practice of Internal Audit and the principles set out in
the King Report on Corporate Governance
d) The concepts and principles relevant to a risk based
audit approach are explained and applied in
accordance with Internal Auditing practice
e) The concepts and principles relevant to the
communication of risks to management and/or the
audit committee are explained and applied in
accordance with the requirements of the King Report
on Corporate Governance
Specific outcomes for a) The concepts and principles relevant to internal
unit Ic.2 control are explained in the Standards for the
Provide information and Professional Practice of Internal Audit.
advice on the objectives, b) The concepts and principles relevant to evaluating a
nature and evaluation of system of internal control are assessed in accordance
internal control. with Internal Audit Practice (Including the use of
Risk Models, Control Self Assessments).
c) The principles relevant to the test of controls are
assessed in accordance with Internal Audit Practice
d) The concepts and principles relevant to specific
control problems relating to Information Systems
environments are assessed in accordance with
Internal Audit Practice.
e) The concepts and principles relevant to the

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communication of weaknesses in the internal control
system to management and/or the Audit Committee.

Learning outcomes Assessment criteria Assessment


methods
Unit Id
Internal Audit
Reporting
Specific outcomes for a) The concepts and principles relevant to the internal
unit 1d.1 audit report are explained, applied and managed in line
Describe, apply and with the Standards for the Professional Practice of
manage the process of Internal Audit.
reporting audit findings. b) The concepts and principles relevant to due diligence
reviews are explained and applied in line with the
Standards for the Professional Practice of Internal
Audit.

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INTERNAL AUDITING 4 MODULE 2 (IAUD421)

Scheme of work
Sections Outcome Reference Text Reference
Corporate Governance, Unit 1c.1 ISPPIA 2010, 2100,
Risk Management, Internal 2110, 2120, 2130,
Control and Internal 2200
Control Evaluation in
manual and automated King Report on Chapter 3
systems. Corporate
Governance

COSO & Risk Based Chapter 4


Audit Approach

Business processes & Chapter 5, 7


IT risks & controls.
The audit process of Unit 1c.1 ISPPIA 1000, 2200, Chapter 13, 15
gathering and evaluating 2300,
evidence for assurance and
consulting audit
engagements.
Companies Act Unit 1c.1 Companies Act, 2008
Process of Reporting Audit Unit 1c.2, ISPPIA 2300, 2400, Chapter 14
Findings 1d.1 2500, 2600

Prescribed Reading:
The following book is compulsory for this course:
Internal Auditing: Assurance and Advisory Services 3rd edition, By Reding, Sobel,
Anderson, Head, Ramamoorti, Salamasick, and Riddle.

Recommended Reading:
Internal Auditing: An Introduction 4th Edition, P Coetzee, R du Bruyn, H Fourie, K
Plant.
Performing Internal Audit Engagements 4th Edition, P Coetzee, R du Bruyn, H Fourie,
K Plant.
Advanced Internal Audit Topics 4th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant.

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