Admas University

Faculty of Business
Department of Accounting and Finance
Course Outline

Course Title: Auditing Principles and Practices II

Course Code: AcFn 3122

Credit Hours: 3

Prerequisite: AcFn 3121

Academic Year

Instructor Name

Course coordinators

Course Description
The course is the continuation of Auditing Principles and Practices I, and to that end covers the
topics dealt with in that course as well as introducing new concepts, EDP audits, tests of control,
substantive tests, auditing the accounting information system, and computing the audit. The
course also covers the very recent auditing issues, such as: assurance engagements, compliance
audit, and audit of governmental and NGOs.

Course Objectives
After completing the courses, students will be able to:

 discuss the use of computer programs for auditing;

 describe how samples are selected and determined to assess the audit risk;
 apply the concept of auditing in different transaction cycles;
  evaluate findings, investigate inconsistencies, modify the work program as necessary,
review subsequent events, and prepare appropriate reports, including recommendations to
enhance business performance;

 apply the auditing concepts for assurance and other engagement;

 identify the professional responsibilities of the government auditor and internal auditor;
 discuss and apply the auditing requirements for governmental and not-for-profit
organization.
Course Contents
Chapter Topic Time
Allotted
1 AUDIT PROCESS 6hrs

1.1. Audit strategy

1.2. Planning
1.3. Evidence
Documentation
Related party
Management Responsibility
Using work of other
1.4. Evaluation & review
Opening Balance & comparatives
Other in formation
Subsequent event
Going concerts
1.5. Completing
Evaluating finding
Forming an opinion
2 8hrs
CHAPTER 2: FINANCIAL STATEMENT AUDIT

2.1. Audit of current asset

Audit of cash
Audit of receivables
Audit of Inventories & cost of goods sold
2.2. Audit of non – current asset
Audit of plant asset & depression
Audit of intangible assets
2.3. Audit of liabilities
Audit of A/P and purchase
Audit of other liabilities
2.4. Audit of capital (owners’ equity Statement)
3 Audit Sampling in Substantive Tests 8hrs
 3.1 Substantive testing: A variables sampling plan
3.2 Difference estimation and ratio estimation
3.3 Drawing the sample and evaluating sample results
3.4 Probability-proportional-to-size sampling
3.5 Non-statistical sampling in substantive tests

4 The Audit of Accounting Information Systems 10hrs

4.1 Sales cycles
4.2 Purchase cycle
4.3 Payroll cycle
4.4 General ledger and reporting cycle
4.5 Production cycle
5 Completing an Audit 7hrs
5.1 Auditing an accounting estimates
5.2 Auditing related party transactions
5.3 Audit of beginning balances of accounts
5.4 Subsequent events review
5.5 Management representation letter
5.6 Obtain the specialists advice
6 Assurance Engagements and Other Services 5hrs
6.1 Types of assurance engagements
6.2 Assurance reports
6.3 Compilations and reviews of financial statements
6.4 Interim financial statements
6.5 Reports expressing an opinion on internal control
6.6 Agreed-upon procedures
6.7 Reports on compliance with contractual agreements or
regulatory requirements
7 Compliance Auditing and Internal Auditing 4hrs
7.1 Compliance auditing
7.2 Government Auditing Standards
7.3 Internal Auditing
7.4 Independence of internal auditing
7.5 Operational auditing
7.6 Relating internal and independent auditing

Teaching & Learning Methods

 Lectures  Presentations
 Interviews  Guest lecturing
 Group Discussion  Problem based learning
 Question & Answers
Assessment Methods
Grand
FAT SAT
Total
Formative Assessment 50% 50%
100%

10 %FA 4
FA 3
group work 10 % FA 2

Individual presentation of
FA 1

10 %
Practical Individual or
Quiz (at least
two) 20 %

class participation
the group work
FA1 A FA1 B

Key:
 FA: Formative Assessment
 FAT: Formative Assessment Total
 SAT: Summative Assessment Total
Text Book

 Arens, Elder, & Beasley (2012) Auditing and Assurance Services An Integrated
Approach 14th Ed Prentice Hall New York

Reference

 Gupta and Arora (1996). Fundamentals of Auditing. Tata Mc Graw Hill New Delhi

 Hayes and etal (2005) Principles of Auditing An Introduction to International Standards

on Auditing 2nd Ed Prentice Hall London

 Hayes and Schindler (1999). Principles of Auditing-An International Perspectives.

McGraw Hill London

 Howard F, Sterttren. Auditing Principles, A System Base Approach, 5th ed,

 Kell and Ziegler (1980). Modern Auditing 2nd ed John Wiley and Sons New York

 Whittington and Pany (2001). Principles of Auditing 13th ed McGraw Hill New York
 ACCA, Paper 6