Auditing BCH-207, B.Com (Honors) Regular & Self Support

Introduction:

This course provides an intensive conceptual and applied introduction to auditing in society. It focuses on concepts and applications related to financial-statement auditors’ professional responsibilities as well as major facets of the audit process including risk assessment and audit reporting. In Pakistan financial-statement audits and related services generally are provided by Certified Public Accountants (CPAs). To succeed in this course, one should anticipate engaging in critical thinking and thoughtful communication about audit professionals' decision environments, decision processes, and deliverables.

Course Prerequisite:

Student must have the knowledge of Accounting in order to comprehend this course.

Learning Outcomes:

On successful completion of this course, students will be able to:

1. Explain the role of management in the preparation of financial reports.
2. Apply fundamental audit concepts.
3. Identify and evaluate material business risks in accordance with Auditing Standards.
4. Identify and test internal control procedures.
5. Identify research on significant auditing issues and current developments in auditing theory and practice.
6. Explain the role of auditing in society.

Recommended Text Book:

Auditing by Muhammad Irshad
Auditing by A.H. Millichamp published by British Library Continuum
Practical Auditing by Spicer & Pegler‘s by Butter worth & Co. Ltd.
Journals/Periodicals: Journal of Management Accounting, ICAP
Auditing, CA Examination Study Text (latest edition) Professional Business Publication, Lahore.
Contemporary Auditing, Gupta, Kamal (2005) Tata McGraw Hills, Dehli.

Exam Evaluation:

Individual Class Presentations/Projects* Regular Class Presentations/Participation/ Attendance (5%) Assignment (10%) Class Quiz/Case Studies (5%)	20%
Mid Term Examination	30%
Final Examination	50%
	100%

Lesson Plan:

*Auditing Lesson Plan*
Week 1	Nature and Purpose of Auditing: Definition, Characteristics, Audit & Accounting Difference, Objectives, Advantages of Audit.
Week 2	Nature and Purpose of Auditing: Errors & Fraud, Audit Functions, Limitations of Auditing
Week 3	Nature and Purpose of Auditing: Classification of Audit: Statutory Audit, Private Audit, Government Audit, Internal Audit, Continuous Audit, Final Audit, Interim Audit, Cost Audit, Management Audit
Week 4	Legal and Professional Considerations: *Auditor of Limited Company*: Appointment Procedure, Qualification, Disqualification, Removal and Remuneration, Rights and Duties, Status of Company Auditor
Week 5	Legal and Professional Considerations: *Auditor of Limited Company*: Appointment Procedure, Qualification, Disqualification, Removal and Remuneration, Rights and Duties, Status of Company Auditor
Week 6	Audit Planning and Control (ISA 300, 320): Audit Planning: Pre-requisites of Audit, Audit Planning, Audit Programme.
Week 7	Audit Evidence and Documentation (ISA 500, 230): Audit Note Book, Audit Working Papers
Week 8	Audit Procedures and Techniques (ISA 210, 315, 330): *Audit Sampling*
Week 9	Audit Procedures and Techniques (ISA 210, 315, 330): Vouching: Vouching of assets and liabilities, scrutiny of trading, profit and loss account, sampling techniques, compliance techniques, substantive testing, analytical review, and use of computer assisted audit techniques (CAATs), reliance on other auditors, and reliance on experts.
Week 10	Audit Procedures and Techniques (ISA 210, 315, 330): *Verification:* Verification of assets and liabilities, scrutiny of trading, profit and loss account, sampling techniques, compliance techniques, substantive testing, analytical review, and use of computer assisted audit techniques (CAATs), reliance on other auditors, and reliance on experts.
Week 11	Completion of an Audit & The Reporting of Audit: *Audit reports*, their contents and qualifications, forms of qualifications, statement of compliance, dating and signatories of the auditors‘ report, other information in report containing audited financial statements, reports on accounts of association of persons and sole traders, special purpose reports, requisites of code of corporate governance.
Week 12	Completion of an Audit & The Reporting of Audit: *Audit reports*, their contents and qualifications, forms of qualifications, statement of compliance, dating and signatories of the auditors‘ report, other information in report containing audited financial statements, reports on accounts of association of persons and sole traders, special purpose reports, requisites of code of corporate governance.
Week 13	Liabilities of Auditor
Week 14	Applicable Auditing Standards ISA 200, 210, 230, 240, 300, 315, 320, 330, 500, 505, 700, 705, 706.
Week 15	Internal Controls: Definition, meaning objectives, types, principles and techniques of internal control, difference between internal check and internal control, categories of internal control, systems of internal control, key components and important elements of internal control, limitations on the effectiveness of internal control/audit, evaluation of internal controls and accounting systems, substantive procedure, and analytical procedure, tests of controls: purchase system, sales system, payroll system, inventory system, cash system, capital and expenditure, controls in small entities, internal control in an EDP environment Internal Audit: Scope and limitations and types of internal audit, responsibilities of internal auditor, internal audit and corporate governance, internal audit assignments, outsourcing the internal audit function, impact of internal controls and audit work, issuance of management letter, relationship between internal and external audit, audit working papers, functions of chief internal auditor, reporting by internal auditors, difference between internal audit and external audit, reliance of external auditor on internal auditor‘ report.
Week 16	Internal Controls: Definition, meaning objectives, types, principles and techniques of internal control, difference between internal check and internal control, categories of internal control, systems of internal control, key components and important elements of internal control, limitations on the effectiveness of internal control/audit, evaluation of internal controls and accounting systems, substantive procedure, and analytical procedure, tests of controls: purchase system, sales system, payroll system, inventory system, cash system, capital and expenditure, controls in small entities, internal control in an EDP environment Internal Audit: Scope and limitations and types of internal audit, responsibilities of internal auditor, internal audit and corporate governance, internal audit assignments, outsourcing the internal audit function, impact of internal controls and audit work, issuance of management letter, relationship between internal and external audit, audit working papers, functions of chief internal auditor, reporting by internal auditors, difference between internal audit and external audit, reliance of external auditor on internal auditor‘ report.