SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION
Fundamentals of Auditing
Spring Semester 2024
Mahesar , Sajjad Ahmed .ACMA
Instructor
Room No.
Office Hours
Email
Telephone
8 , 2nd floor knowledge centre
Monday and Thursday 02:30pm to 04:00pm
sajjad.ahmed@iba-suk.edu.pk
03335647066
COURSE BASICS
Credit Hours
Lecture(s)
Recitation/Lab (per week)
Tutorial (per week)
4
Nbr of Lec(s) Per Week
Nbr of Lec(s) Per Week
Nbr of Lec(s) Per Week
2
N/A
On need basis
Duration
Duration
Duration
2 hours , each.
N/A
Appropriate to cover the content.
COURSE DISTRIBUTION
Core
Elective
Open for Student Category
Close for Student Category
Core B.S Accounting and Finance
Finance
COURSE DESCRIPTION
This course introduces students to auditing principles and practice. Students learn International Auditing Standards, professional
and ethical requirements and the Legal & Regulatory Framework to conduct audit engagements.
The courses covers the complete lifecycle of financial statement audit that covers acceptance of audit engagement, developing
a
competitive
proposal,
complying
with
independence
and
other
ethical
requirements, risk assessment and development of audit program, finalization of audit and issuing final auditor’s opinion.
This course also gives an overview of governance, internal auditing and assurance engagements other than audit.
COURSE PREREQUISITE(S)


Accounting courses
Financial Reporting (FRA)
COURSE OBJECTIVES



To develop knowledge and understanding of:
­
­
Auditing and Assurance Services
­
Applicable legal, regulatory and ethical framework.
the process of carrying out audit and review of financial statements; and


SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION
LEARNING OUTCOMES

On completion of this course, students should be able to:

Understand the nature, purpose and scope of auditing in public, private and not-for-profit entities,
and its regulatory and ethical framework.

Discuss the preconditions, requirements of professional ethics and other regulatory requirements in
relation to the acceptance or continuance of audit engagements.

Obtain understanding of the entity and its environment, assess risks and plan audit of financial statements.

Describe and evaluate accounting and internal control systems and identify and communicate control risks,
potential consequences and recommendations thereon.

Explain and evaluate sources of evidence, describe the nature, timing and extent of tests on class of
transactions and account balances (including sampling and analytical procedures) and design programs for
audit and review assignments.

Evaluate findings, investigate inconsistencies and modify the work program as necessary.

Explain how the conclusions from audit work are reflected in different types of audit report.
GRADING BREAKUP AND POLICY
Assignments & Quizzes (n-1):
Project :
Midterm Examination:
Final Examination:
15%
15%
30%
40%
EXAMINATION DETAIL
Midterm
Exams
Yes/No:
Combine Separate:
Duration:
Preferred Date:
Exam Specifications:
Yes
Combined
2 hours
TBA
Short cases
Final Exam
Yes/No:
Combine Separate:
Duration:
Exam Specifications:
Yes
Combined
3 hours
long cases
COURSE OVERVIEW
WEEK
TOPICS
RECOMMENDED
READINGS
SESSION OBJECTIVES
SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION
1
Introduction to auditing and
assurance
Chapter 1, 4
IAASB framework
ISA 200
2
Legal and Regulatory
Environment and
Overview of government auditing
Chapter 2
CO 1984, Specimen auditor’s report, ISA
250










What is assurance?
Levels of assurance
Objective of audit
Materiality
True and fair view
Public sector auditing
Limitations of audit
IFAC, IAASB, ISAs, ISREs, ISQCs
Standard setting procedures
Statutory requirement of audit
and small co. exemption
SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION
3
Corporate Governance and
Internal Audit
Chapter 14
CCG summary
Internal Auditing Standards (IIA)





4
ICAP Code Of Ethics
Acceptance or Continuance
Procedures
Chapter 3, 5
Code of ethics, ISA 210,
Listing regulations (Selected)




5
Revision and 1 mid Mid Term
Exam
-
6
Planning and Risk Assessment
Chapter 6
Chapter
ISAs 240, 250, 300, 315, 320, 520, 500,
330
ISRE 2400

­

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
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



Importance
Basic principles
Audit committees, role,
function, advantages and
disadvantages
External vs. internal, audit
Responsibilities of external
auditor internal auditor, mgt.
BOD.
Public sector perspective
Eligibility, appointment,
removal, tenure, rights and
obligations of auditors
Cases on application of code
Procedures for accepting new
appointments
Engagement letter
Importance of planning
Understanding the entity and
its environment and analytical
procedures
Audit risk and its components
Risk assessment , significant
risk, fraud risks
Special considerations for
NGOs
Materiality assessment
Sources of evidence +
assertions
Development of Audit Strategy
and Plan
7
Internal Control Framework
Chapter 7
COSO Integrated Framework for
Internal Controls





Importance of IC
Internal Control Objectives
Components of IC
Inherent Limitations
Information Technology
General Control (ITGC)
8
Documentation and Reporting
Weaknesses
Chapter 8
Sample audit plans, specimen planning,
summary, current file
ISA 315, 230, 260, 265



Documentation
Reporting to management
Reporting to those charged
with governance
Reporting non-compliance of
laws
Reporting fraud and errors


SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION
9
Revision and 2 mid Mid Term
Exam
-
­
SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION
10
Tests of Controls
Chapter 7, 8
ISA 330
11
Audit Evidence, Audit Sampling
and Analytical Procedures
&
Verification of Specific Areas and
opening balances
Chapter 9, 10
ISA 540, 510, 550
ISAs 500, 501, 505, 530, 580
Sample Audit Programs
Designing and applying Test of
Controls for:
 Sales
 Purchases
 Payroll
 Inventory
 Cash and bank
 Tests of control and
substantive procedures
 Sufficiency and
appropriateness
 Sources of evidence
 Management representations
 Related parties
 Designing
and
applying
substantive audit procedures
for:
­ Receivables
­ Inventories
­ Payables
­ Cash and bank
­ Fixed assets
­ Liabilities
­ Estimates
12
Using the Work of Others
Chapter 13
ISAs 600, 610, 620
13
Review and Finalization
Procedures
Chapter 11
ISAs 450, 560, 570
14
Reporting
15
Reporting (cont’d) and
Revision and Consolidation of
Learning
Chapter 12
ISAs 700, 705, 706, 710, 720
ISRE 2410, specimen reports
Chapter 12
ISAs 700, 705, 706, 710, 720
ISRE 2410, specimen reports
Using work of:
 Experts
 Internal auditors
 Other Auditors
 Subsequent events
 Going concern
 Quality control
 Review
 Documentation
 Compilation
 Review
 Documentation
 Compilation
SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION
TEXTBOOK(S)/SUPPLEMENTARY READINGS
Recommended Text Book


Rick Hayes, R. D. (2005). Principles of Auditing: An Introduction to International Standards on Auditing (Vol. 2nd
Edition ). Gosport: FT Prentice Hall.
BPP. (2011). Auditing and Assurance F8 (Global).: BPP.
Other Readings

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Selected International Standards on Auditing
Relevant sections of Company’s Ordinance 1984
ICAP Code of Ethics for Professional Accountants
Extracts from Code of Corporate governance
Selected Cases and articles