• Understand the regulatory environment and the importance of International Standards on Auditing (ISAs).
• Develop skills in assessing inherent and control risks within various business cycles.
• Master the techniques for gathering sufficient and appropriate audit evidence.
• Enable students to document audit workpapers that meet professional and legal requirements.
• Cultivate an ethical mindset, focusing on professional skepticism and integrity.

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

1. Plan an audit engagement by identifying risk areas and setting materiality levels.
2. Execute tests of controls to evaluate the effectiveness of an organization’s internal systems.
3. Perform substantive procedures, including analytical reviews and detailed testing of transactions.
4. Evaluate audit evidence to form a conclusion on the fairness of financial statements.
5. Draft an audit report and communicate findings effectively to management and stakeholders.

Module 1: Audit Planning and Risk Assessment

• The Audit Process: Overview of the stages from engagement acceptance to final reporting.
• Audit Risk Model: Analyzing the relationship between Inherent Risk, Control Risk, and Detection Risk.
• Materiality: Determining quantitative and qualitative thresholds for financial misstatements.
• Understanding the Entity: Procedures for identifying risks of material misstatement due to fraud or error.

Module 2: Internal Controls and Compliance Testing

• Components of Internal Control: Evaluating the control environment, risk assessment process, and monitoring activities.
• Documentation Techniques: Using flowcharts, narratives, and internal control questionnaires (ICQs).
• Tests of Controls: Designing procedures to check if controls are operating effectively (e.g., authorization, segregation of duties).
• Reporting on Controls: Identifying and communicating significant deficiencies to those charged with governance.

Module 3: Substantive Procedures – Assets and Liabilities

• Audit of Non-Current Assets: Verifying existence, ownership (rights), and valuation (depreciation/impairment).
• Inventory Auditing: Observing physical counts and testing for cut-off and net realizable value (NRV).
• Receivables and Payables: Direct confirmation procedures (circularization) and subsequent payment testing.
• Bank and Cash: Reviewing bank reconciliations and verifying year-end balances.

Module 4: Substantive Procedures – Income and Expenses

• Revenue Recognition: Testing for occurrence and accuracy in the sales cycle.
• Operating Expenses: Vouching expenses to supporting documentation (invoices, contracts).
• Payroll Audit: Testing for “ghost employees,” correct tax withholdings, and gross pay calculations.
• Analytical Procedures: Using ratios and trend analysis to identify unusual fluctuations in the Statement of Profit or Loss.

Module 5: Completion, Review, and Reporting

• Subsequent Events: Identifying events occurring between the reporting date and the audit report date (IAS 10).
• Going Concern Review: Assessing management’s assumptions about the entity’s ability to continue operations.
• Management Representation Letters: Understanding the purpose and limitations of written representations.
• The Audit Report: Drafting unmodified vs. modified opinions (Qualified, Adverse, and Disclaimer of Opinion).

Project