Auditing Principles and Practices

Course Leader: Donnelie Kondwani Muzividzi

Home Institution: Chinhoyi University of Technology, Zimbabwe

Course Overview

This course is built upon the Auditing Principles and Practices and seeks to consolidate the student’s understanding of the latest techniques and practices as articulated in the International Auditing Standards (ISAs) and Guidelines and the Companies Act, Professional Code of Ethics.

Learning Outcomes

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

  1. a) Develop a deeper appreciation of the nature and scope of auditing and its importance in the current dynamic business environment.
  2. b) Develop a thorough understanding of the legal provisions governing the audit profession and process.
  3. c) Apply some of the concepts and techniques propounded to practical situations.

Course Content

Nature, purpose and scope of an audit

  •     Development of the audit profession
  •     Ethical base of auditing
  •     Accountability and the agency theory

Principles and concepts

  • Independence, objectivity and integrity
  • Confidentiality
  • Diligence, skills and competence
  • Types of Audits
  • Statutory Audits
  • Private Audits
  • Internal Audits
  • Management Audits
  • Investigative Audits
  • Appointment of an Auditor – Companies Act (24:03)
  • Who cannot be an Auditor? – Companies Act (24:03)

Audit procedures

  • Substantive procedures
  • Analytical Review procedures
  • Compliance Procedure

Audit risk

  • Components of Audit Risk
  • Managing Audit Risk

Materiality and judgments

  • Factors affecting materiality
  • Auditor’s responsibility in relation to materiality
  • Materiality and Audit Risk – the relationship

Audit opinion

  • Communication
  • Audit Reports
  • Differences and similarities between Internal Audit Reports and External Audit Reports
  • Differences and similarities between Internal Auditors and External Auditors
  • Management Letter/ Letter of weaknesses
  • Engagement Letter
  • Letter of Representation
  • Responsibility of management in relation to Audited work
  • Audit Planning and supervision
  • Why plan?
  • Difficulties faced
  • Benefits of audit planning
  • Auditor’s Responsibility in relation to an entity’s going concern
  • Auditor’s Responsibility in relation to Post Balance Sheet events
  • Auditors and Specialist
  • Auditor’s reliance on specialist
  • Auditor’s responsibility in relation to work done by a specialist
  • Audit Evidence
  • Reliability of Audit evidence
  • Collection of Audit evidence
  • Sampling techniques
  • Advantages and disadvantages of sampling

Framework of auditing

  • Application of principles and concepts
  • Ethical codes for professional auditors
  • Detection and reporting of fraud
  • Withdrawal from engagement contracts

Instructional Method

Each section of the course outline will be thoroughly discussed (taught) in the lecture, with comprehensive examples articulated to the students. In support to this method students are encouraged to prepare for group project.

Required Course Materials

Recommended but not limited to

Ray Whittington, Kurt Pany, ‘Principles of Auditing and Other Assurance Services, 21st Edition Mc Graw Hill, 2019

NB:    The lecturer will provide the most up to date electronic core texts

(Provide specific information about required readings, software…)

Assessment

Course work comprises of Case study analysis and assignments, with 30 percent weight of the final mark.

Final examination

The final examination is worth 70% of the grade for the course. The date of the final examination to be advised.

The final mark will be a summation of course work and the exam mark.

The lecturer will provide course evaluation forms to students, once completed, to be submitted to the chairman before the students write the exam. The chairman will provide feedback to the lecturer.