Exam Unit: Audit (2.3)

Learning Outcome

To demonstrate an understanding of the nature and scope of scrutiny in such detail as will enable the auditor to form an opinion as to the accuracy, truth and fairness of records and accounts. The Learner will be able to demonstrate knowledge of the procedural aspects of auditing and internal auditing, the legal liability of auditors, investigations, specialised assignments, and an awareness and understanding of modern techniques and practices used in internal auditing.

Scope and Purpose of Audit:
1. The development of modern auditing
2. The ethical base of auditing
3. Social concept of modern audit and auditors roleRegulatory Framework:
1. Auditing standards, legislation, case laws, European Directives, Financial Services Act
2. Role of the Government and DTI, Audit Commission, National Audit Office, Recognised Supervisory Body (RSB), Recognised Professional Qualifications (RPQ), Independent Accountant
3. Supervision and monitoring of auditorsPrinciples and Concepts:
1. Integrity and confidentiality
2. Verification of vouchers and documents
3. Due care, skill and competence
4. Audit planning, supervision and risk
5. Audit reportFramework and Planning of Audit:
1. Application of auditing standards and guidelines
2. Professional obligations and legal liability of auditors
3. Auditors’ responsibility for the detection and reporting of fraud
4. Developing the audit plan5. Determining the areas of risk and analysing informationCollecting and Analysing Evidence:
1. Collecting, selecting and analysing evidence
2. Sampling techniques for audit purposes
3. Co-operation between internal and external auditors
4. Need for and limitation of use of specialists

Overview of Internal Auditing:
1. Definition of internal auditing
2. Internal auditing as a profession
3. Internal control and reporting

Auditing Procedures:
1. Preparing the audit programme
2. Determining the internal control system
3. Test checks of the system and evaluation of test results
4. Review of management accounts
5. Role of working papers
6. Analytical review
7. Computer and audit
8. Reliance on other auditors for group accounts
9. Management certificates/letters
10. Review of financial statementsAudit Reports:
1. Small and medium sized companies
2. Group accounts
3. Abbreviated accounts
4. Qualified and unqualified reports
5. Report to management on internal controls and polices
6. Writing styleAudit Techniques:
1. Systems approach to auditing
2. Internal Control Questionnaires
3. Document flowcharting
4. Audit interviewing
5. Communication audit findings and recommendationsManagement of Internal Auditing:
1. The report line and other reporting relationships
2. Risk analysis
3. Quality and quality audit
4. Value for money from internal auditing
5. Audit committees
6. Internal audit and the future