COURSE DESCRIPTION

The Audit and Assurance subject provides knowledge to understand the nature and diversity of audit and assurance engagements. The subject provides an insight view of audit and assurance processes, the methodologies and its procedures. It examines the objectives of assurance engagements, current and future developments in assurance engagements. The environment in which the auditor/assurance practitioner operates, and the roles of the private and public sector auditors as well as internal audit will be discussed.

This paper aims to provide the quality control standards for audit and assurance engagements and the fundamental principles of ethics applied in the auditing profession. This paper adopts a risk-based approach to audit and assurance services,  viewing the practice and the theoretic aspect of auditing which is applicable in a global environment.  Application of auditing concepts to financial statement audits is one of the key aim.

• Understanding the framework for assurance engagements and applying it in audit, review engagements and assurance engagements, and to discuss the elements of an assurance engagement.
• Explain and apply the requirements of the audit, review and assurance standards that are applicable to all engagements.
• Design the audit procedures taken by the auditors in conducting audit and assurance engagements
• Application of the relevant auditing standards to asses fraud and going concern during the audit of financial statements
• Explanation of the purpose and role of performance audits
• Identify and describe the types of assurance engagements
• Discuss the nature of internal audit

The Audit and Assurance syllabus can be broken down into five broad areas. The syllabus commences with internal & external nature, purpose and scope of assurance engagements including the statutory audit, its regulatory environment, with the introduction of governance and professional ethics in relation to audit and assurance. It then moves into audit planning and performing risk assessment procedures. The syllabus then gives insight to a range of areas in relation to the audit of financial statements which also includes the scope of internal control. This is further broken down into the evaluation of internal controls, audit evidence, and a review of the financial statements. In addition to the final review procedures undertaken, the final section concentrates on the reporting of the conducted audit, which includes the form and content of an independent auditor’s report.

Linking with other papers:

It assumes some knowledge from paper F4 Corporate & Business Law & F7 Financial reporting. Further it sets the basics for the papers SBL Strategic Business Leader, P7 Advanced Audit & Assurance.

Key areas of paper:

 This paper will ensure a full understanding of the procedures for carrying out the assurance engagement which will provide information to the related contexts of the professional regulatory framework.

• The role of auditing and ethical decision making
• Overview of assurance concepts and the audit procedures
• Audit planning
• Audit evidence
• Audit sampling
• Internal control
• Substantive procedures – tests of transactions and balances
• Reporting obligations.

KEY FEATURES

•  Self-study programs with chapter wise video lectures, study material and practice bank.
• Live teaching sessions with recorded facility
• Easy access to e-study material including comprehensive study notes, revision notes, summary notes.
• Extensive practice bank based on real exam environment
• Mock test with marking and review facility from subjects experts
• 24/7 tutor support

LEARNING OUTCOME

Upon successful completion of this subject, students should:

1. Be able to provide an explanation of the role of assurance services and its providers
2. Be able to identify and evaluate the effect on the audit procedures, including the Corporations Act, Common Law, Australian and International professional standards, professional bodies and public expectations within a global market
3. Be able to appraise the client’s business environment and apply the relevant risks
4. Be able to select, apply & explain the procedures involved in the audit process
5. Be able to appraise the scope of audit in the current international business environment.

The candidates should be able to:

1. Explain the concept of audit and assurance and the functions of audit, corporate governance, which includes ethics and professional conduct, describing its scope and differentiating between the functions of internal and external audit.
2. Demonstration of how an auditor obtains and accepts audit engagements, obtains an understanding of the entity and its environment, assessing the risk of material misstatement and to plan an audit of financial statements
3. Description and evaluation of internal controls, techniques and the audit tests, which also include the IT systems which identify and communicate control risks and its possible consequences, making an appropriate recommendation.
4. Identify and describe the work and evidence obtained by an auditor which are required to meet the objectives of audit engagements and the application of the International Standards on Auditing (ISAs)
5. Explaining how consideration of subsequent events and the going concern principle can provide a conclusion from the audit work and which are reflected in the types of auditor’s report, written representations and the final review and report.