CBA - Auditing and Assurance Specialized Industries - 2

University of Nueva Caceres
Naga City
COLLEGE OF BUSINESS AND ACCOUNTANCY
AUDITING AND ASSURANCE: SPECIALIZED

INDUSTRIES
SARAH M. AUGUSTO, CPA

AUDITING AND ASSURANCE: SPECIALIZED INDUSTRIES
By: Sarah M. Augusto, CPA
Copyright © 2021 by Sarah M. Augusto and the University of Nueva Caceres
Note that the course pack provided to you in any form, including this Study Guide, is
intended only for YOUR use in connection with the course that you are enrolled in.
LEARNING MATERIALS INCLUDED IN YOUR COURSE PACK ARE NOT FOR
DISTRIBUTION OR SALE. Permission should be obtained from your instructor for any
use other than for what it is intended.
Published in the Philippines by the University of Nueva Caceres

Office of the Vice President for Academic Affairs
JH10, JH Bldg., University of Nueva Caceres,
J. Hernandez Ave. Naga City,
Camarines Sur, Philippines
Printed in the Philippines

First printing, January 2021
Table of Contents
Module 0 Course Orientation 1
Study Guide 1 Overview of Audit and Assurance: Specialized Industries 18
Study Guide 2 Risk-Based Audit 23
Study Guide 3 Substantive Test 24
Appendix A Understanding the Entity and Its Environment 26
Appendix B Introduction to Auditing and Assurance of Specialized Industries 31

University of Nueva Caceres
J. Hernandez Avenue, Naga City
Tel. No. +63-054-472-6100 local 115
UNIVERSITY OF NUEVA CACERES

The University of Nueva Caceres, a private non-sectarian institution, is Bicol’s
first university.
Guided by its motto, “Non-Scholae Sed Vitae” (Not of School but of Life), and
VISION
attuned to the demands of a highly dynamic global environment, the
STATEMENT
University of Nueva Caceres commits itself to quality and excellent education
for all to transform the youth into entrepreneurial, productive, morally
upright, socially responsible professionals for a just, humane and progressive
society.
The University of Nueva Caceres shall be a leading exponent of academic

excellence, research, extension, and innovative technology for sustainable
development.
MISSION
STATEMENT It creates a nurturing academic environment and provides equal
opportunities in the formation of individuals into empowered leaders,
competent professionals and proactive entrepreneurs who are cognizant of
our rich cultural heritage.
1. PURSUE the nurturing and strengthening of social institutions with

empowered leaders, skilled professionals, and proactive
entrepreneurs for the development of the Bicol Region and the
Filipino nation;
2. PRODUCE graduates who entrepreneurial, productive, morally

upright, environmentally conscious, globally responsive and socially
UNIVERSITY
responsible citizens;
OBJECTIVES
3. PROPAGATE the culture of excellence through a continual process of
introspection, integration and improvement of programs, facilities
and services;
4. PROVIDE the University personnel with the means to enhance their

personal well-being and professional skills to effectively carry out
balanced curricular and development programs.
CORE
1. We champion excellence. We consistently strive for excellence in
VALUES
everything we do.
Auditing and Assurance: Specialized Industries
1
2. We nurture dreams. We passionately guide and inspire our students to
leverage their potentials and aspire for better lives.
3. We do the right things right. We uphold integrity in everything we do.
We hold ourselves to high standards for accountability and character.
We do things right.
4. We are dynamic and creative. We anticipate the forces of change. We
explore possibilities with intent and purpose.
5. We respect each other and work as a team. We collaboratively
maximize our talents and capabilities. We hold each other in high regard
and passionately realize our shared purpose, priorities and promises.
Ex - Excellence Driven
C - Culturally- Rooted with Multi-Cultural Understanding
Collaborative
GRADUATES Creative and Critical Thinker
ATTRIBUTES Compleat Leader (Compleat means Accomplished, Masterful, Great)
E - Effective Communicator
Ethically and Socially Responsible
L - Life-Long Learner

The UNC College of Business and Accountancy envisions its graduates as
leaders and active agents in nation building by entrepreneurship and by
VISION
honest, dedicated service in government and private entities, contributing to
STATEMENT
the improvement of the quality of life of the Filipino, and responsive to the
demands of the global business environment.
The benefits of quality and excellent business and accountancy education shall
be made accessible to the youth through the provision of rich and diverse
MISSION curricular programs and alternative learning system that will transform
STATEMENT individuals into competent professionals, empowered leaders, and proactive
managers and entrepreneurs possessing the ideals of competence, integrity,
and moral and social responsibility.
PROGRAM EDUCATIONAL OBJECTIVES

Three to five years after graduation, BSA graduates are expected to:
PEO 1 Adapt to the developments in the Accountancy profession through life-long

learning engagements
Pursue graduate or law studies
Maintain updated CPA license
Acquire Accreditation (BOA, SEC, BIR, CDA etc)
Acquire Professional Certification (CISA, CMA, CIA)
PEO 2 Adhere to the Code of Ethics in the practice of the Accountancy profession
Exercise objectivity, due care and skepticism required of the accountancy
profession.
PEO 3 Contribute to nation-building by assuming leadership responsibilities
2
Assume supervisory/managerial positions
Lead projects along accounting and its related fields
PROGRAM OUTCOMES
At the time of graduation, the students of the BS Accountancy program should be able to:
General
POa Communicate clearly and effectively with stakeholders both in oral and written
forms.
POb Work effectively and independently in multi-disciplinary and multi-cultural teams

(PQF level 6 descriptor)
POc Promote “Filipino historical and cultural heritage” (based on RA 7722)
POd Act in recognition of personal and professional development
Technical
POe Implement business- related activities by applying the basic functions of

management and basic concepts that underlie in each of the functional areas of
business (marketing, finance, human resource, production/operation)
POf Resolve business issues and problems, with global perspective and particular
emphasis on matters confronting financial statement preparers and users, using
their knowledge and technical proficiency in the areas of financial accounting, cost
accounting and management, management accounting, auditing, taxation,
regulatory framework for business transactions and accounting information
systems.
POg Conduct accounting research, as a tool to critically, analytically and creatively solve
problems and drive results
POh Employ technology as a business tool in capturing financial and non-financial

information, generating reports and making decisions.
POi Apply knowledge and skills to successfully respond to various types of assessments
(including professional licensure and certifications
POj Maintain a commitment to good corporate citizenship, social responsibility and

ethical practice in performing function as accountants
COURSE INFORMATION
Program BS Accountancy
Term, School Year 2nd Semester, SY 2020-2021
Course Code BSA 323k
Course Title Auditing and Assurance: Specialized Industries
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Course Description This course is designed to orient the students in the application of
the audit standards techniques and procedures in the risk-based audit
process in specialized industries. Specialized industries include
government agencies (GOCC’s & LGU’s), banking industries, real
estate, not for profit entities, BPO’s, broadcasting companies,
hospitals, cooperative, academe, telecommunications, and
constructing companies.
The course will cover the stages of risk-based audit process,

namely risk assessment (Preliminary engagement activities, planning
the audit and performance of the risk assessment procedures) and risk
response (designing and tests of controls and substantive test of
transaction in the revenue and collection cycle, expenditure cycle and
financing and investing cycle). Lastly, the application of audit
procedures in performing substantive tests of transactions and account
balances.
Course Outcomes At the end of the course, the students should be able to:
1. Identify the peculiarities in auditing specialized industry
2. Perform risk-based audit process (risk assessment and risk

response)
3. Perform substantive test of transactions and account balances

and prepare working papers
Faculty In-Charge Sarah M. Augusto, CPA

Contact Email: sarah.augusto@unc.edu.ph Mobile Phone: +639-126981581
Information
Consultation Hours Saturday 1:00-2:00pm
Granularized Course Outcomes
Intended Teaching and

Course ILO
CO Modules Learning Learning Assessment Feedback
Outcomes Level
Level Outcomes Activities Mechanism
Explain the Explain the UNC Faculty to
school VM and Core conduct course Zoom or
Module 0
philosophies, Values, CBA VM orientation; Google meet,
Course
discuss course I I and BSA PEO Students to n/a Class GC, FB
Orientati
requirements review/reflect Messenger,
on
and grading on school E-mail, SMS
system and philosophies
4
write the Discuss the course
statement of requirements, Faculty to
purpose or E grading system and conduct course n/a
commitment classroom and orientation
school policies
Write a statement
of purpose or Students to
commitment to the participate in the
D course and essay; rubric
BB discussion
program forum
Discuss the Students to read 5-10-item

importance of the assigned pre-test
understanding the chapter as pre-
nature of businessclass work Recitation/re
or industry in sponses to
conducting audit Faculty to give a discussion
5-10-item pre- questions in
test BB and
I during the
Students to synchronous
answer session
discussion
questions during
synchronous
sessions and in
the BB Zoom or
discussion forum Google Meet,
Study
Describe the Students to read Responses to Class GC, FB
Guide 1:
I nature of the assigned discussion Messenger,
operations of the chapter as pre- questions in e-mail, SMS
following class work BB and
specialized during the
industries: Students to synchronous
government study and session
agencies (GOCC’s analyze sample
& LGU’s), banking audited financial
statements for
E industries, real
each specialized
estate, not for industry with
profit entities, emphasis on the
BPO’s, notes to FS to
broadcasting describe nature
companies, of operations
hospitals,
cooperative, Students to
present their
academe, output during
5
telecommunicatio synchronous
ns, and class
constructing
Faculty to give
companies
feedback on the
output
Identify the Students to

peculiarities in study sample
auditing latest Audited
Financial
specialized
Statements for
industry each specialized
industry with
emphasis on the
notes to FS to
spot on and
summarize
peculiarities
D
Post-test
Students to
present their
output during
synchronous
class
Faculty to give
feedback on the
output
Discuss the Students to read 5-10-item

framework of risk- the assigned pre-test
based audit chapter as pre-
class work Recitation/
responses to
Study Zoom or
Faculty to give a discussion
Guide 2: Google Meet,
5-10-item pre- questions in
Risk- Class GC, FB
test BB and
based Messenger,
E I during the
audit e-mail, SMS
Students to synchronous
answer session
discussion
questions during
synchronous
sessions and in
the BB
discussion forum
6
Perform risk- Students to Responses to
based audit conduct case discussion
process (risk study/analysis questions in
BB and
assessment)
Students to during the
present their synchronous
E output during session
synchronous
class
Faculty to give
feedback on the
output
Perform risk- Students to
based audit conduct case
process (risk study/analysis Post-test
response)
Students to
present their
D output during
synchronous
class
Faculty to give
feedback on the
output
Analyze the Students to read 5-10-item
transactions the assigned pre-test
chapter as pre-
class work Recitation/
responses to
Faculty to give a discussion
5-10-item pre- questions in Zoom or
Study
test BB and Google Meet,
Guide 3:
during the Class GC, FB
Substanti
D I Students to synchronous Messenger,
ve Tests
answer session e-mail, SMS
discussion
questions during
synchronous
sessions and in
the BB
discussion forum
7
Perform Students will Responses to
substantive test of engage in discussion
transactions and problem-solving questions in
E BB and
account balances
during the
synchronous
session
Prepare working Students to Case
papers present their Simulation
output during
synchronous
D class
Faculty to give
feedback on the
output
MODE OF DELIVERY, COMMUNICATION SYSTEM AND OTHER SUPPORT SYSTEM

This RED Learning Kit is to be delivered on a printed modular modality. This is the modality
that students may choose if they are facing either a zero-internet connectivity at home, or an
unstable internet connectivity. If you have chosen this modality, you are in self-study mode.
You are expected to follow the study guide for this course. A minimum of 6 hours per week
is required for you to work for this course or a total of 54 hours in 9 weeks.
You are expected to submit the requirements as due for better navigation of the course. For
writing and presentation requirements, you are expected to avail of grammar and spelling
checker.
Consultation with your teacher should be at least once a week observing the class hours
using these channels;
Email – sarah.augusto@unc.edu.ph
FB messenger account –
2055 BSA 323k LPa Auditing and Assurance: Specialized Industries 2 SY 2020-
21
2056 BSA 323k LPb Auditing and Assurance: Specialized Industries 2 SY 2020-
21
Collaboration with group mates and classmates should be at least once a week as
scheduled through our Group Chat or through text messaging. Hence it is important that you
provide me with your FB messenger account and your cellphone number if possible.
On the other hand, if you chose the Flexi Tech modality, it means that your internet
connectivity at home is stable, and therefore you can make use of the Learning Management
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System or LMS for your learning activities at home. In this modality, you will have learning
sessions that will be done asynchronously, meaning, you will follow through the lessons,
instructions and activities using the LMS by connecting on-line. You can do this at your own
pace and time, preferably at the time that is prescribed in your schedule of classes to help you
on managing your time properly. You will also have synchronous classes with your teacher
and classmates, meaning, you will get to meet with them virtually by using platforms such as
Zoom or Google Hangouts. The schedules are provided in the class schedule. However,
whenever there are adjustments in the schedule of meetings because of certain exigencies,
you will be informed about it through a message in the Group Chat which we will create, or
through text messaging.
Section Day Time Google Meet Details

2055 BSA323k-LPa S 9:00-12:00nn Meeting ID: meet.google.com/jxs-woue-vrf
2056 BSA323k-LPb S 2:00-5:00pm Meeting ID: meet.google.com/esn-txex-wxr
In a face-to-face mode of delivery, we meet during class hours at an assigned room. That has
changed in a remote set up whether flexi kit or flexi tech solutions. Instead of meeting every
week at a pre-assigned time and place, a large portion of your work will involve independent
study tasks. This means you will need to pace yourself, direct your own learning experience,
be disciplined in managing your time, and target to complete assignments on or before the
due date.
Every week, I designed a Study Guide which provides details on how you should engage with
the core topic and whether this will be supported by a live meeting via Zoom or Google Meet.
The lesson/topic for each week is designed following the UNC outcome-based education
delivery format. You must view these study guides at the start of the week to give you clarity
of what lies ahead and what is expected of you during the week.
COURSE REQUIREMENTS AND GRADING SYSTEM

The following shows a summary of the different assessments that we will be conducting in
relation to the course outcomes. These assessments intend to measure whether you have
reached the expectations of the course through the different lessons and learning activities
that we will have in the entire delivery of the course:
A formative assessment is an “assessment for learning”. It intends to determine what your

learning needs are and what interventions are needed to meet your learning needs and
improve your competencies and skills. A summative assessment is an “assessment of
learning”. It intends to measure whether you have already achieved the expected outcomes
of the course.
Grading System
This will be our Grading System. Take particular note of the components so that you can
strategize on how you can achieve a good final mark in this subject:
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Mid-term
70% Participation
Attendance/weekly log-in/consultation 10
Participation in formative assessment 10
Graded Projects/Activities/ Summative Assessment 50
30% Midterm Exam
Final
70% Participation
Attendance/weekly log-in/consultation 10
Participation in formative assessment 10
Graded Projects/Activities/Summative Assessment 50
30% Final Exam
Final Grade= (Mid-term + Final)/2
Cut-off for every assessment to be marked 75% is 60%. This means that for 10-item
assessment, the student should get at least 6 correct answers to get the 75% mark.
GRADING SYSTEM
Range Numerical Grade Interpretation
99% - 100% 1.0 Excellent
96% - 98% 1.25 Very Superior
93% - 95% 1.50 Superior
90% - 92% 1.75 Very Good
87% - 89% 2.0 Good
84% - 86% 2.25 Very Satisfactory
81% - 83% 2.50 Satisfactory
78% - 80% 2.75 Fair
75% - 77% 3.0 Pass
74 and below 5.0 Fail
ASSESSMENT TOOLS
Rubrics for Case Analysis
Criteria Satisfactory Very Satisfactory Excellent
(Inquire) I can identify most or all I can Identify most or I can clearly,
Identify and key issue/s and/or all key issue/s and/or accurately, and
define key problem/s; with have problem/s; with some appropriately identify
issue/s, and/or some inaccuracies or minor inaccuracies or key issue/s and /or
problem/s omissions or errors that omissions that do not problem/s
(20pts) interfere with meaning interfere with meaning (20pts)
(10pts) (15pts)
10
(Analyze) I present some I present sufficient and I present appropriate,
Present and appropriate appropriate sufficient and credible
analyze data/ data/information. I data/information; I data/information; I
information miss/ignore relevant generally analyze clearly analyze
(20pts) data/information; My data/information for information for
analysis is limited or accuracy, relevance and accuracy, relevance,
somewhat inappropriate. validity. Minor and validity.
This may contain inaccuracies or Information clearly
inaccuracies or omissions omissions do not relates to meaning.
that interfere with interfere with analysis
analysis and/or meaning or meaning. (20pts)
(10pts) (15pts)
(Evaluate) I have a somewhat I acknowledge multiple I clearly apply a multi-
Apply a simplified position with approaches. I provide dimensional
multidimensio some sense of multiple some synthesis of approach. I synthesize
nal approach / approaches. I provide perspectives; I may not various perspectives;
consider minor or vague synthesis fully acknowledge I acknowledge limits
context of perspectives; some limits of position or of position or context
(20pts) acknowledgment context, but am aware
positions may have limits. of limits or context
May not acknowledge (20pts)
context (15pts)
(10pts)
(Solve) I can provide a reasoning I can provide a I can provide a
Demonstrate that contains elements of reasoning that is mostly reasoning that is
sound logic and/or creative logical, complete and logical and creative,
reasoning and insight, but not fully consistent. I consistent, complete
conclusions resolved. May have minor demonstrate some and often unique; I
(20pts) inconsistencies or unique or creative can formulate a
omissions; I can insight; I can formulate conclusion that is
formulate conclusion that a conclusion that is complex and/or
is relevant but generally complete, detailed, well
abbreviated or simplified, supported, and mostly supported, creative,
not fully supported, and / consistent and relevant complete and relevant
or contains minor (15pts) (20pts)
inconsistencies
(10pts)
Language and My work is not well My work has better My work has an
Structure organized. It indicates structure with a logical excellent coherence
(Max. 20 pts) poor vocabulary and progression. It and progression. Its
grammar and with observes competent ideas are well
numerous errors. vocabulary and structured. There is
(10 pts) grammar but with an effective and
occasional errors. accurate use of
(15 pts) vocabulary and
grammar, very few to
no errors at all.
(20pts)
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ASSESSMENT TOOLS
Rubrics for Discussion Forums
Criteria Satisfactory Very Satisfactory Excellent
Observations I give simplistic I give an adequate I give sophisticated
and Insights observations, provide degree of observations, and thoughtful
(Max. 50 pts) little or no insight, some insight and observations, high
comment or analysis. My analysis. My work is degree of insight and
work is more descriptive reflective and analysis. My work has
than reflective considered outcomes evidence that
(30 pts) but lack depth outcomes have been
processed and
(40 pts) reflected upon.
(50pts)
Comments and I rarely engage with other I engage with other I actively engage with
Discussions group members and do group members, but other group members,
(Max. 30 pts) not use relevant literature rarely use relevant and adequately use
or factors on the literature or factors on relevant literature or
pertinent issues and the pertinent issues factors on the
discussion. and discussion to pertinent issues and
support the argument discussion to support
with relevant evidence. the argument with
(20 pts) relevant evidence and
(25pts) introduce new
perspectives.
(30pts)
Language and My work is not well My work has better My work has an
Structure organized, predominantly structure with a logical excellent coherence
(Max. 20 pts) descriptive with little progression. It uses and progression. Its
interpretation or limited interpretation ideas and
reflection. It indicates and reflections. It observations are well
poor vocabulary and observes competent structured. There is
grammar and with vocabulary and an effective and
numerous errors. grammar but with accurate use of
(10 pts) occasional errors. vocabulary and
(15 pts) grammar, very few to
no errors at all.
(20pts)
COURSE SCHEDULE
Week/ Topics/ Teaching & Learning Activities Expected
Date POs & COs Asynchronous Synchronous Output
Module 0 Reading of course Setting of expectations Statement of
Week 0 guide Commitment
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Setting Course Self-introduction via
Expectatio Orientation LMS
ns
Weeks 1-2 CO 1 Study Reading the assigned Lecture-discussion Result of

Guide1: chapter analysis of
Presentation of output sample audited
Answering the 5-10 financial
item pre-test Feedback statements for
each
Analysis of sample specialized
audited financial industry
statements to
identify nature of
operations and
peculiarities
Answer in the
Blackboard
discussion forum
Weeks 3-4 CO 2 Study Reading the assigned Lecture-discussion

Guide 2: chapter Case
Answering the 5-10 Presentation and study/analysis
item pre-test discussion of answers
Answer in the to problems solved
Blackboard
discussion forum Feedback
Midterm Exam
Weeks 5-9 CO 3 Study Reading the assigned Lecture-discussion Case simulation

Guide 3: chapter
Answering the 5-10 Presentation and
item pre-test discussion of answers
Answer in the to problems/cases
Blackboard solved
discussion forum
Feedback
Problem-solving
Final Exam
For our class schedule, kindly refer to the official matriculation form. The university classifies
the subject into cluster 1 and cluster 2. Cluster 1 subjects will be taken in the first nine (9)
weeks of the semester while cluster 2 subjects will be taken in the last nine (9) weeks
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This course is to be taken as part of the second cluster subjects. You are expected to devote
at least six hours a week for this subject. This means that you have to double the time
specified in the matriculation form so that you will complete the learning activities and
assessments as specified in the table above.
For flexi kit class, we will have a consultation session at least once a week at the time indicated
in your matriculation form. The day of this session will be determined and announced on our
first day of classes. This meeting will be conducted via zoom or google meet for those with
internet connectivity or via call for those who do not have internet connectivity.
Announcements will be posted in our class GC. Please tune in.
For flexi-tech class, we will have a weekly synchronous session at the time indicated in your
matriculation form. The day of this session will be determined and announced on our first
day of classes. This meeting will be conducted via zoom or google meet.
In both flexi kit and flexi tech solutions, our interaction through consultation or synchronous
sessions would be approximately 2 hours out of 6 hours required by the subject on a weekly
basis. This means that in most parts of the required hours or approximately 4 hours a week,
you are on self-study mode. During this time, you are expected to do your part as a diligent
and responsible learner. Refer to this RED learning kit as a complete guide on how to acquire
the competencies and comply with the course requirements. Though we have scheduled
consultation or synchronous sessions, you can give me a ring or send a message in our class
GC for urgent concerns. I will try to respond within the day or in 24 hours.
Aside from our interaction and your interaction with the content, you are also encouraged to
interact with your peers or classmates in this course. There are requirements that need
collaboration with your classmates. May you enjoy this activity.
Exam schedules, place and manner of examinations are to be announced.
STUDENTS’ REQUIRED SKILLS AND ENVIRONMENT IN A DISTANCE LEARNING MODE

Distance learning covering both flexible tech-driven and printed modular modalities may
sound so wonderful that some of you may start with an unrealistic vision. In reality, these
learning modalities require just as much, if not more, time, energy, motivation and discipline
as traditional classroom courses. So, it is imperative that you possess specific skills and apply
learning strategies to be successful in these learning modalities.
To better equip you for distance learning, it is highly recommended that you take and
complete a Coursera course- MINDSHIFT: Break Through Obstacles to Learning and Discover
Your Hidden Potential. Mindshift teaches the essentials of online learning. It provides
practical insights from science and certain mental tools so you can learn and do more—far
more—than you might have ever dreamed!
You can avail this course as a free course, which means no certificate will be provided to you
after completion. However, the skills and learning strategies that you will gain are helpful in
your university journey.
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Aside from the Coursera course, we have the summary of skills and learning strategies that
will surely help you in this distance learning mode: I would like you to carefully read the list
and apply these in all your courses.
1. Persistence
Persistence is perhaps the biggest key to succeed in distance learning. This means that you
should have the willingness to tolerate technical problems, initiative to seek help when
needed, discipline to work daily on every class, and motivation to persist through challenges.
You should understand that you will run into challenges, but keep trying and ask for help. You
have to set up a manageable study schedule and stick to it. You are expected to log in and
make progress every day. Have that discipline, stick to your schedules even after the novelty
of going to distance learning starts to wear off! Keep going! Your daily little progress when
sums up will be surely of significant value at the end of this course.
2. Effective Time-Management Skills

Next, time management. You must be able to manage your time well. This flexibility is one of
the great benefits of distance learning. But it can also be a drawback if you procrastinate,
unable to stick to a routine study schedule, or is not able to complete assignments without
daily reminders from your teacher.
Effective time-management skills don't just happen. You have to learn this by practice. Once
you do, you will benefit from it throughout your life. So, follow the tips below to develop
yours:
● You are encouraged to review the syllabus for each of the courses. You must develop
a comprehensive plan for completing the course requirements and assessments.
● Make a daily "To Do" list. And have fun checking things off the list as you complete
them.
It takes time to develop good habits. But, at the end, you will surely gain satisfaction from
being well-organized and in accomplishing your tasks.
3. Effective and Appropriate Communication Skills

Another is about communication. This skill is vital in distance learning because you must
seek help when you need it. We, your teachers are willing to help you, but we are unable to
pick up on non-verbal cues, such as a look of confusion on your face. You are advised to follow
these tips:
● Use the tools provided by your courses as channels for communication. Our
school and your program provide several ways for us to communicate. These might
include e-mail, discussion groups, chat room office hours, cell phones, and even text
messaging. We want to help you to succeed in your classes and will surely answer
your questions.
You may feel awkward to talk with your teachers this way, but these channels aim to
bridge the communication gaps in distance learning. So, go ahead and see the
channels specified in this course.
15
● Use appropriate style and language for school. When communicating with your
teachers and other staff, you should write in full, grammatically correct sentences and
with a respectful tone. While many of you are used to a very informal style of writing
in chat rooms, blogs, text messages, and so forth, for academic training in UNC along
English Immersive Environment (EIE), you are encouraged to be mindful of your
language and sentence construction.
Because of the distance, it's tempting for some of you to say things out of anger or frustration
that you would never say to your teacher in person. We, your teachers in distance learning
are both professionals and persons. We expect to be treated with respect and courtesy in the
same way that you do in a physical classroom; and with persons whom you encounter every
day like your family. Let us always remember the UNC Core Value: We Respect Each Other
and Work as a Team.
4. Basic Technical Skills

The fourth skill is about technology. You as learners need basic technical skills to succeed.
These include your ability to create new documents, use a word processing program, navigate
the internet and the learning management system, and download software and files. We will
have an orientation on how to use the learning management system and other online tools.
If you lack basic computer skills, we are encouraging you to find an online tutorial and learn
from there. You may also want to check the UNC’s main website for its hardware and software
requirements to see the compatibility of your own gadgets
5. Reading and Writing Skills

Another is about reading and writing as the main ways to communicate in distance learning
modality. Although some hard copies of textbooks might be required, you should be
comfortable reading a lot of documents on a computer screen and able to type.
Though some tests and quizzes have multiple choice questions, many of your assignments
will involve writing short or long answers. So appreciate these learning activities to improve
your writing skills.
6. Motivation and Independence

The sixth skills are about motivation and independence. To be successful, you must want to
succeed. Distance learning requires independence, internal motivation, responsibility, and a
certain level of maturity.
Kindly reflect on these questions:
What are your reasons for attending school?

Are you determined and self-motivated to succeed in school?
Your answers are worthwhile reasons to work hard in school. In the future, it will give you a
greater level of personal satisfaction with your career. Perhaps it would be simply a personal
pride in your accomplishments.
16
7. A Good Study Environment
The last but not the least is having a good study environment. This is a critical factor in
distance learning. Refer to the helpful tips below:
● Get some peace and quiet. You will need a quiet place to work without distractions
from things like television, family, or roommates.
● Avoid games. Consider uninstalling any computer games to avoid temptation. Or
keep the games on a different computer in the house.
● Turn off mobile phone devices. Let your friends and family members know the
hours that you will be "at" school.
● Beware surfing the black hole of the Internet. It is easy to lose track of the time as
you wander from site to site.
● Consider ergonomics. Adjust the height of your chair, keyboard, and screen so that
you will be comfortable. Forearms and thighs should be level and parallel to the floor.
Wrists should not be bent while typing.
● Set up good lighting and comfortable seating. Lighting in the room should be at
least as bright as the computer screen to avoid eye strain.
Go back to the above list from time to time to be reminded of helpful tips to succeed in distance
learning or probably in life in general.
OTHER COURSE POLICIES

General Requirements
Each student is expected to perform in a number of positive ways so as to develop and/or
enhance both tangible and intangible competencies and appreciation. As a facilitator of learning in
these areas, the following expectations must also be met:
1. Thoroughly read and submit all course requirements by the due dates.
2. Communicate with the faculty via LMS, email, class GC or mobile phone number.
3. Conduct yourselves in a professional manner.
4. Check the LMS and class GC regularly.
5. For submission of large files, use the class Google drive
Feedback Mechanism
Correct answers to pre-tests and objective-type quizzes are automated; that is, they will
be shown after submission of the answers, except when there are students who have not taken the
assessment yet, in which case, correct answers will be provided when everyone in the class is done.
Feedback to assignments will be given during synchronous class. The faculty may provide
individual feedback using the feedback feature of Blackboard, or through Messenger or email.
Written Works: Accuracy and Attribution
Individual submitted work may be handwritten or word-processed, while group outputs
must be word-processed, following the format recommended by the APA (American Psychological
Association) citation guidelines (6th Edition). The faculty will adhere to all university policies
regarding the originality of work, examination protocols and behavior, and grading practices.
Students are expected to be familiar with them. Individual and group work submitted by students
must be original. Using other works not properly referenced, especially long passages, may result
in a grade reduction or other appropriate actions as required by the severity of the situation,
including reporting the infraction to the Dean of the School of Graduate Studies. Accurate and
17
complete referencing will avoid any and all problems in this regard. If you use a reference from
the Internet, the complete URL is required in your bibliography per APA citation standards (6th
Edition).
Honor Code
We uphold the UNC Core Values and this is our commitment with respect to academic integrity.
I am an advocate of academic integrity. I commit to be transparent in acknowledging the work of

others. I commit not to cheat on exams, plagiarize or misrepresent the ideas of someone else as my
own, falsify data and engage in the instances that tainted academic integrity.
I commit to UNC Core Values of Doing the Right Things Right!
Keeping Second Copies of Your Work

Students should retain second copies of all material submitted to the faculty. All written
work submitted to the LMS must contain the student’s name.
Course and Faculty Evaluation by Students
Students will be provided with an opportunity to evaluate the course and the faculty, as
well as relevant materials and activities used in the course delivery. Student feedback is welcome
any time. The best avenue is LMS, email, faculty or mobile phone number.
Prepared by:
Sarah M. Augusto
Reviewed and Approved by:

Cerila C. Sanchez
Dean, College of Business and Accountancy
18
Study Guide 1: Overview of Audit and Assurance: Specialized Industries
Week/Date: Weeks 1-2
Checklist for Weeks 1 -2
Done? Learning Tasks ILO Assessment Target Date Assessment

level Estimated of Result
Duration Completion
Study Guide 0 I Statement of 30 minutes Day 1 of
purpose or week 1
commitment; Apr 10
rubric
LT 1: Reading I Discussion 5.5 hrs Week 1
assignment Forum; rubric; Apr 10
pre-test
LT 2: Study and E Discussion 3 hrs Week 2
Analysis forum; class Apr 17
discussion
during
synchronous
session
LT 3: Study and D Discussion 3 hrs Week 2
Analysis forum; class Apr 17
discussion
during
synchronous
session
Post-test
Intended Learning Outcomes
By the end of weeks 1 to 2, you should be able to:
I Discuss the importance of understanding the nature of business or industries in

conducting audit
E Describe the nature of operations of specialized industries
D Identify the peculiarities in auditing specialized industries
Module 0
Learning Task 0
Write your statement of purpose or commitment and submit either in BB discussion
forum or in the class Google drive
Study Guide 1
Learning Task 1
READ: Appendix A: UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT

19
Assessment: Answer the 5-10-item pre-test
Synchronous session: Discussion of the topic
Learning Task 2
READ: Appendix B: INTRODUCTION TO AUDITING AND ASSURANCE OF

SPECIALIZED INDUSTRIES
https://www.accaglobal.com/gb/en/student/exam-support-
resources/professional-exams-study-resources/p7.html
Study and analyze the samples of audited financial statements then identify
the nature of operations of each specialized industry.
1. Government Agency
https://www.pagibigfund.gov.ph/document/pdf/transparency/2019/FS/Audited%20Fin
ancial%20Statements%20as%20of%20December%2031,%202019.pdf
2. Banking
https://www.pds.com.ph/wp-content/uploads/2020/04/Disclosure-No.-1284-2020-
2019-Audited-Financial-Statements.pdf
3. Real Estate
https://www.cebuholdings.com/wp-content/uploads/2016/12/2015-audited-financial-
statements.pdf
4. Not for Profit Entity

http://asorianofoundation.org/wp-content/uploads/2019/10/ASF-Audited-Financial-
Statement-F.Y.-2018-2019.pdf
5. BPO
6. Broadcasting Company
https://www.abs-cbn.com/governance/reports/annual-reports/2019-annual-report-
with-audited-financial-statemen/id-105
7. Hospital
https://mediatrixmedcenter.com.ph/wp-content/uploads/2020/07/Mary-Mediatrix-
Medical-Center-Inc._AFS2019_30June2020.pdf
8. Cooperative
https://bcbmpc.com/wp-content/uploads/2020/07/AFS-2019.pdf
20
9. Academe
https://www.sti.edu/disclosures/pdffiles/STI%20ESG%20Bonds,%20Final%20prospectus
%20Annex%20B%20(March%202017).pdf
10. Telecommunications
https://www.pds.com.ph/wp-content/uploads/2020/02/Disclosure-No.-543-2020-
Audited-Financial-Statements-as-of-December-31-2019.pdf
11. Constructing Company

https://megawide.com.ph/wp-content/uploads/2020/12/MWIDE-2019-conso-AFS-and-
schedules.pdf
Synchronous session: Discussion and presentation of output
Learning Task 3
Study and analyze the same set of samples of audited financial statements then
identify the peculiarities of each specialized industry
Synchronous session: Discussion of the topic and presentation of output
Assessment: Post-test
References
https://aasc.org.ph/downloads/PSA/publications/PDFs/PSA-315-Redrafted.pdf
Cabrera, Ma. Elenita Balatbat (2020). Assurance Principles, Professional Ethics, Good
Governance
https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-
exams-study-resources/p7/technical-articles/specialised-industries.html
Note:
Synchronous sessions are intended for those who availed of the flexi-tech modality. However,
students who opted for RLK are highly encouraged to attend these sessions.
As part of supervised learning, students who opted for RLK should report for weekly consultation
using either FB messenger or SMS.
21
On assessment, test questions will be posted in BB LMS for flexi-tech students and the same will
be available at the class google drive or FB messenger for flexi-kit students. Suggested answers
for these questions will be posted to class Google drive.
On presentations, small group consultations and individual consultations BB LMS, Zoom, Google
Meet, Email, Class Google drive, and FB messenger are available platforms that students can
select from depending on their capabilities.
22
Study Guide 2: Risk-Based Audit
Week/Date: Weeks 3-4
Checklist for Weeks 3 to 4
Done? Learning Tasks ILO Assessment Estimated Target Date Assessment

level Duration of Result
Completion
LT 1: Reading I Discussion 4 hrs Week 3
assignment Forum; rubric;
pre-test
LT 2: Case Study/ E Discussion 4 hrs Week 3, 4
Analysis forum; class
discussion
during
synchronous
session
LT 3: Case Study/ D Post-test 4 hrs Week 4
Analysis
I Discuss the framework of risk-based audit

E Perform risk assessment
D Perform risk response
Learning Task 1
READ: Risk-based audit, risk assessment and risk response from below references:
Textbook Cabrera, M.E., Cabrera, G. A. (2020-2021). Applied and Assurance

Concepts and Applications. GIC Enterprises
https://www.ifac.org/system/files/publications/files/SMP-ISA-Audit-Guide-
Volume-1-3e_0.pdf
Synchronous session: Discussion of the topic
Learning Task 2
Asynchronous Session:
23
At the BB Test Section, answer the assigned cases/problems.
For RED Learning Kit Students, case study/ problem solving questions will be
available in your module or via other online platforms (Email, Class Google drive, and
FB messenger)
Synchronous session: Recitation/discussion of cases/problems solved
Learning Task 3

FB messenger)
Synchronous session: Recitation/discussion of cases/problems solved
Assessment: Post-test
Reference
Textbook:
Cabrera, M.E., Cabrera, G. A. (2020-2021). Applied and Assurance Concepts and
Applications. GIC Enterprises
https://www.ifac.org/system/files/publications/files/SMP-ISA-Audit-Guide-Volume-1-
3e_0.pdf
Note:
24
Study Guide 3: Substantive Test
Week/Date: Week 5-9
Checklist for Week 5-9

Done? Learning Tasks ILO Assessment Target Date Assessment
level Estimated of Result
Duration Completion
LT 1: Review of I Discussion 3 hrs Week 5
accounting Forum; rubric;
standards and audit pre-test
standards
LT 2: Problem- E Problem-solving 12 hrs Week 5,6,7
solving
LT 3: Working paper D Output 15 hrs Week 7,8,9
preparation Presentation
I Analyze the transactions.

E Apply audit standards and accounting standards
D Prepare working papers
Learning Task 1
READ: Textbook Cabrera, M.E., Cabrera, G. A. (2020-2021). Applied and Assurance

Concepts and Applications. GIC Enterprises
Synchronous session: Discussion of topic
Learning Task 2

FB messenger)
Synchronous session: Recitation/discussion of assignment

25
Learning Task 3

FB messenger)
Synchronous session: Recitation/ discussion of output
Reference
Textbook Cabrera, M.E., Cabrera, G. A. (2020-2021). Applied and Assurance Concepts and
Applications. GIC Enterprises
Note:
26
Appendix A
UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT
PSA 315 (Clarified) deals with the auditor’s responsibility to identify and assess the risks of
material misstatement, whether due to fraud or error, at the financial statement and assertion
levels, through understanding the entity and its environment, including the entity’s internal
control, thereby providing a basis for designing and implementing responses to the assessed risks
of material misstatement.
The auditor’s understanding of the entity and its environment consists of an understanding of the
following aspects:
a) Relevant industry, regulatory, and other external factors including the applicable
financial reporting framework.
(b) The nature of the entity, including:
(i) Its operations;

(ii) Its ownership and governance structures;
(iii) The types of investments that the entity is making and plans to make; and
(iv) The way that the entity is structured and how it is financed, to enable the
auditor to understand the classes of transactions, account balances, and
disclosures to be expected in the financial statements.
(c) The entity’s selection and application of accounting policies, including the reasons for
changes thereto. The auditor shall evaluate whether the entity’s accounting policies are
appropriate for its business and consistent with the applicable financial reporting
framework and accounting policies used in the relevant industry.
(d) The entity’s objectives and strategies, and those related business risks that may result
in risks of material misstatement.
(e) The measurement and review of the entity’s financial performance.
A. INDUSTRY, REGULATORY AND OTHER EXTERNAL FACTORS, INCLUDING THE APPLICABLE

FINANCIAL REPORTING FRAMEWORK
The auditor should obtain and understanding of relevant industry, regulatory, and other
external factors including the applicable financial reporting framework.
These factors include:
a. Industry conditions such as the:

● competitive environment
● supplier and customer relationships
27
● technological developments
b. Regulatory environment encompassing:

● legal and political environment
● environmental requirements affecting the industry and the entity
c. Other external factors such as general economic conditions
Examples of matters an auditor may consider include the following:

a. Industry conditions
● The market and competition, including demand, capacity, and price
competition
● Cyclical or seasonal activity
● Product technology relating to the entity’s products
● Energy supply and cost
b. Regulatory environment
● Accounting principles and industry specific practices
● Regulatory framework for a regulated industry
● Legislation and regulation that significantly affect the entity’s operations
● Regulatory requirements
● Direct supervisory activities
● Taxation
● Government policies currently affecting the conduct of the entity’s business
● Monetary, including foreign exchange controls
● Fiscal
● Financial incentives (for example, government ai programs
● Tariffs, trade restrictions
● Environmental requirements affecting the industry and the entity’s business
c. Other external factors

● General level of economic activity (for example, recession, growth)
● Interest rates and availability of financing
● Inflation, currency revaluation
B. NATURE OF THE ENTITY
The auditor should obtain an understanding of the nature of the entity.
The nature of entity refers to:
a. Entity’s operations
b. Ownership and governance
c. Types of investments that it is making and plans to make
d. The way the entity is structured and financed
28
An understanding of the nature of an entity enables the auditor to understand the
classes of transactions, account balances, and disclosures to b expected in the financial
statements.
To obtain understanding of the nature of the client, auditors attempt to answer the
following types of questions:
a. “What is the client’s business model?”

b. “Who are its major customers and suppliers?”
c. “What types of transactions does the client engage in?”
d. “How are the transactions accounted for?”
The auditor should obtain and understanding of the entity’s selection and application
of accounting policies and consider whether they are appropriate for its business and
consistent with the applicable financial reporting framework and accounting policies
used in the relevant industry.
Examples of matters and auditor may consider include the following:
Business Operations:
● Nature of revenue sources

● Products or services and markets
● Conduct of operations
● Alliances, joint ventures, and outsourcing activities
● Involvement in electronic commerce
● Geographic dispersion and industry segmentation
● Location of production facilities, warehouses, and offices
● Key customers
● Important suppliers of goods and services
● Employment
● Research and development activities and expenditures
● Transactions with related parties
Investments
● Acquisitions, mergers or disposals of business activities
● Investments and dispositions of securities and loans
● Capital investment activities
● Investments in non-consolidated entities
Financing
● Group structure – major subsidiaries and associated entities including
consolidated and non-consolidated structures
● Debt structure, including covenants, restrictions, guarantees, and off-statement
of financial position financing arrangements
● Leasing of property, plant or equipment for use in the business
● Beneficial owners
29
● Related parties
● Use of derivative financial instruments
Financial Reporting
● Accounting principles and industry specific practices
● Revenue recognition practices
● Accounting for fair values
● Inventories
● Foreign currency assets, liabilities and transactions
● Industry-specific significant categories
● Accounting for unusual or complex transactions
● Financial statement presentation and disclosure
C. OBJECTIVES AND STRATEGIES AND RELATED BUSINESS RISKS
The auditor should obtain and understanding of the entity’s objectives and strategies,
and the related business risks that may result in material misstatement of the financial
statements.
Objectives are the overall plans for the entity defined by the entity’s management or
those charged with governance.
Strategies are the operational approaches by which management intends to achieve its
objectives.
Business risks result from significant conditions, events, circumstances, actions or

inactions that could adversely affect the entity’s ability to achieve its objectives and
execute its strategies, or through the setting of inappropriate objectives and strategies.
Examples of matters an auditor may consider include the following:
a. Existence of objectives relating to, for example, the following:

● Industry developments
● New products and services
● Expansion of the business
● New accounting requirements
● Regulatory requirements
● Current and prospective financing requirements
● Use of IT
b. Effects of implementing a strategy, particularly any effects that will lead to new
accounting requirements
D. MEASUREMENT AND REVIEW OF THE ENTITY’S FINANCIAL PERFORMANCE
The auditor should obtain an understanding of the measurement and review of the
entity’s financial performance.
30
The methods of measuring and reviewing performance are important to the auditors in
determining the incentives of management and other employees because their
compensations is often tied to the measures. These incentives may create pressure on
management or employees to misstate the financial statements or otherwise engage in
fraud. In addition, the auditors may use these measures in designing analytical procedures
to provide evidence about the fairness of the financial statements.
Obtaining an understanding of the entity’s performance measures assists the auditor in

considering whether such pressures result in management actions that may have
increased the risks of material misstatements.
Example of matters an auditor may consider include the following:
a. Key ratios and operating statistics

b. Key performance indicators
c. Employee performance measures and incentive compensation policies
d. Trends
e. Use of forecasts, budgets and variance analysis
f. Analyst reports and credit rating reports
g. Competitor analysis
h. Period-on-period financial performance (revenue growth, profitability, leverage)
E. UNDERSTANDING THE CLIENT’S INTERNAL CONTROL
Internal control is designed to provide reasonable assurance of achieving objectives

related to reliable financial reporting, efficiency and effectiveness of operations, and
compliance with laws and regulations.
The nature and extent of the audit work to be performed on a particular engagement
depend largely upon the effectiveness of the client’s internal control in preventing or
detecting material misstatements in the financial statements.
Before auditors can evaluate the effectiveness of internal control, they need a knowledge
and understanding of how it works; what controls exist and who performs them, how
various types of transactions are processed and recorded, and what accounting records
and supporting documentation exist.
31
Appendix B
INTRODUCTION TO AUDITING AND ASSURANCE OF SPECIALIZED INDUSTRIES
This provides some insight into the matters that need to be considered by auditors when engaged
to provide the external audit service to a client operating in a specialized industry.
What is a specialized industry?
Perhaps it is easiest to start by explaining that a specialized industry is not necessarily rare or even
unusual.
Examples of specialized industries include:
1. Government Agencies (GOCC’s & LGU’s)

2. Banking
3. Real Estate
4. Not for Profit Entities
5. BPO’s
6. Broadcasting Companies
7. Hospitals
8. Cooperative
9. Academe
10. Telecommunications
11. Constructing Companies
What makes these industries specialized is that they are likely either to have specific financial
reporting standards applicable to them, or to have distinct accounting policies which have been
developed to account for specialized transactions and balances which are based on the normally-
applied financial reporting standards.
For instance, IAS® 41, Agriculture is clearly relevant specifically to the agriculture sector and IFRS®,
7 Financial Instruments: Disclosure will need specific application by companies operating in the
banking sector.
AUDIT CONSIDERATIONS
Competence
When accepting an audit engagement involving a specialist industry, the audit firm needs to pay
close attention to the competence of the audit firm to provide the service. ISQC 1, Quality Control
for Firms That Perform Audits and Reviews of Financial Statements, and Other Assurance and
Related Services Engagements requires the audit firm to consider whether the firm is competent
to perform the engagement and has the capabilities, including time and resources, to do so. This
should include consideration of whether the audit firm personnel have knowledge of relevant
32
industries and has experience with relevant regulatory or reporting requirements, or the ability
to gain the necessary skills and knowledge effectively.
Larger audit firms are likely to meet the competence requirement for almost any type of industry
– they will either already possess necessary skill and competence through having existing clients
in the particular industry, or have the resource available to bring in experts and/or provide any
necessary staff training. Smaller firms may have to carefully consider their competence to take on
an audit client in a specialized industry if they have not previously worked with an audit client in
the same industry. However, regardless of size, audit firms may choose to specialize themselves
in the audit of clients in a particular market or sector, for example a smaller firm may specialize in
the audit of clients in the farming sector, or in not-for-profit organizations, so it should not be
assumed that just because an audit firm is small, it would not meet the competence requirement.
The audit firm should also ensure that there is adequate documentation to demonstrate that
competence has been considered, and the steps that have been taken to improve competence
where necessary, for example through appropriate staff training.
Audit Planning
Identification of the risk of material misstatement in a specialized industry should be approached

in the same was as in any other audit – by obtaining appropriate understanding of the business
and its environment. Assuming that staff have the necessary competence, as discussed above,
this should not be problematical.
To assist audit team members assigned to a specialized industry client, the audit firm is likely to
have additional resources available. There may be briefing notes or internal technical guidance
on how financial reporting standards should be applied within the sector. For example, in the
audit of banking sector clients, an audit firm may produce guidance on the specific application of
IFRS® Standards relating to the range of financial instruments typically held by banks. Audit staff
can then refer to this guidance when performing the audit, particularly when identifying risks of
material misstatement.
It is also important to remember that while there may be specific risks of material misstatement
relating to the industry-specific balances and transactions, there must also be appropriate
consideration of the “normal” balances and transactions. For instance, in the audit of a bank,
there will be plenty of risks to consider other than those relating to bank-specific transactions and
balances, for example the depreciation of properties, recognition of provisions and impairment
of goodwill would all still be relevant. These 'normal' types of risk must not be forgotten, just
because the client operates in a specialized industry.
Reliance on Experts
Linked to the previous matters, competence, audit planning and the specialized nature of some
transactions and balances, the auditor may plan to use an auditor’s expert to obtain audit
evidence. This is quite likely in a specialized industry as despite being competent to perform the
engagement, the audit firm may not have the necessary specific expertise in some areas. For
instance, in the audit of a bank, specialists may be brought in to value complex financial
instruments.
33
In this situation, the audit firm must adhere to the requirements and principles of ISA 620, Using
the Work of an Auditor’s Expert which deals with matters including the evaluation of the
objectivity, competence and capabilities of the auditor’s expert, determining and communicating
the scope and objectives of their work, and assessing their findings. It is particularly important
that the auditor evaluates the relevance and adequacy of the expert’s findings or conclusions.
There is a danger of over-reliance on the expert’s work; the fact that the audit is of a specialized
nature does not mean that the auditor can pass all responsibility over to an expert. For instance,
the auditor must consider whether the expert’s findings are consistent with the auditor’s
understanding of the client and with the conclusions of other audit procedures. Any
inconsistencies must be investigated.
Conclusion
The audit of a client in a specialized industry can pose some challenges to the audit firm. However,
with proper consideration of competence, and by providing staff with additional support and
guidance, these audits should not necessarily be more complex or challenging to plan and
perform. Using experts can provide high quality audit evidence in specialist situations, but the
auditor must be careful to fully evaluate the findings of the auditor’s expert and not to over-rely
on their work. For audit staff, working on this type of engagement can be very rewarding,
providing exposure to sometimes unusual businesses.
Source: https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-
exams-study-resources/p7.html
34

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University of Nueva Caceres

COLLEGE OF BUSINESS AND ACCOUNTANCY

AUDITING AND ASSURANCE: SPECIALIZED

SARAH M. AUGUSTO, CPA

Copyright © 2021 by Sarah M. Augusto and the University of Nueva Caceres

Published in the Philippines by the University of Nueva Caceres

Printed in the Philippines

Module 0 Course Orientation 1

Study Guide 1 Overview of Audit and Assurance: Specialized Industries 18

Study Guide 2 Risk-Based Audit 23

Study Guide 3 Substantive Test 24

Appendix A Understanding the Entity and Its Environment 26

Appendix B Introduction to Auditing and Assurance of Specialized Industries 31

UNIVERSITY OF NUEVA CACERES

The University of Nueva Caceres shall be a leading exponent of academic

1. PURSUE the nurturing and strengthening of social institutions with

2. PRODUCE graduates who entrepreneurial, productive, morally

4. PROVIDE the University personnel with the means to enhance their

Auditing and Assurance: Specialized Industries

COLLEGE OF BUSINESS AND ACCOUNTANCY

PROGRAM EDUCATIONAL OBJECTIVES

PEO 1 Adapt to the developments in the Accountancy profession through life-long

POb Work effectively and independently in multi-disciplinary and multi-cultural teams

POc Promote “Filipino historical and cultural heritage” (based on RA 7722)

POd Act in recognition of personal and professional development

POe Implement business- related activities by applying the basic functions of

POh Employ technology as a business tool in capturing financial and non-financial

POj Maintain a commitment to good corporate citizenship, social responsibility and

The course will cover the stages of risk-based audit process,

2. Perform risk-based audit process (risk assessment and risk

3. Perform substantive test of transactions and account balances

Faculty In-Charge Sarah M. Augusto, CPA

Granularized Course Outcomes

Intended Teaching and

Auditing and Assurance: Specialized Industries

Discuss the Students to read 5-10-item

Identify the Students to

Discuss the Students to read 5-10-item

Auditing and Assurance: Specialized Industries

Auditing and Assurance: Specialized Industries

MODE OF DELIVERY, COMMUNICATION SYSTEM AND OTHER SUPPORT SYSTEM

Auditing and Assurance: Specialized Industries

Section Day Time Google Meet Details

COURSE REQUIREMENTS AND GRADING SYSTEM

A formative assessment is an “assessment for learning”. It intends to determine what your

Final Grade= (Mid-term + Final)/2

Auditing and Assurance: Specialized Industries

Auditing and Assurance: Specialized Industries

Weeks 1-2 CO 1 Study Reading the assigned Lecture-discussion Result of

Weeks 3-4 CO 2 Study Reading the assigned Lecture-discussion

Weeks 5-9 CO 3 Study Reading the assigned Lecture-discussion Case simulation

Auditing and Assurance: Specialized Industries

Exam schedules, place and manner of examinations are to be announced.

STUDENTS’ REQUIRED SKILLS AND ENVIRONMENT IN A DISTANCE LEARNING MODE

Auditing and Assurance: Specialized Industries

2. Effective Time-Management Skills

3. Effective and Appropriate Communication Skills

4. Basic Technical Skills

5. Reading and Writing Skills

6. Motivation and Independence

Kindly reflect on these questions:

What are your reasons for attending school?

Auditing and Assurance: Specialized Industries