UNIVERSITI TEKNOLOGI MARA KEDAH
Faculty
: Faculty of Accounting
Course Program
: Diploma in Accounting
Course Subject
: Auditing (AUD 390)
Semester
:6
Resource Person
: Cik. Leily Hj. Adja Radjeman
1.0 OBJECTIVE
At the end of the course, students should be able to:
1.1 Explain the nature, purpose and scope of an audit
1.2 Take an overview of the laws, rules and regulations that should be
observed and complied by the auditor in carrying out the audit function
1.3 Describe the important considerations in the planning of an audit
including risk assessment
1.4 Identify and apply the relevant audit techniques, principles and
procedures
1.5 Understand the basic computer assisted audit techniques (CAATs) as well
as internal control in an EDP environment
2.0 ASSESSMENT
Test 1
10%
Test 2
10%
Assignments/Quizzes
5%
Case study
5%
Final Examination
Total
70%
100%
3.0 SYLLABUS CONTENTS
3.1 Introduction
3.1.1 Development of Auditing
3.1.2 Distinction between Auditing and Accounting
3.1.3 Types of Audit and Auditors
3.1.4 Principles of stewardship, Accounting and Agency
3.1.5 Introduction to Auditing Standards and its Importance
3.2 Introduction to Internal Auditing
3.2.1 Overview of Internal Auditing (Objective, Scope andResponsibilities)
3.2.2 Differences and Similarities between Internal and External Auditing
3.2.3 Coordination between Internal and External Auditor
3.3 Requirements of Companies Act 1965 and MIA Bt-Law (On Professional
Conducts and Ethics)
3.3.1 Qualification of An Auditor
3.3.2 Appointment and Resignation
3.3.3 Duties and Responsibilities
3.3.4 Understanding of MIA By-Laws (On Professional Conducts and
Ethics)
3.4 Audit Planning
3.4.1 Preplan
•
Client Acceptance and Ethical Clearance
•
Letter of Engagement
•
Obtaining Background Information of Client
3.4.2 Use of Analytical Procedures in Planning the Audit
3.4.3 Risk and Materiality
3.5 Audit Evidence and Documentation
3.5.1 Nature and Sources of Audit Evidence
3.5.2 Audit Programmes and Working Papers
3.5.3 Evidence Collection Technique
3.6 Sampling
3.6.1 Statistical versus Non-Statistical Sampling
3.6.2 Attribute and Variable Sampling
3.6.3 Monetary Unit Sampling
3.7 Internal Control
3.7.1 Key Concepts
3.7.2 Use of Internal control System by Auditors including ICQs, ICEQs
and Tests of Controls (Ascertainment, Documentation and
Assessment)
3.7.3 Transaction Cycles (Accounting, Cycle and Internal Control) in the
following areas:
•
Sales and Collection Cycle
•
Purchases and Payment Cycle
•
Payroll and Personnel Cycle
•
Inventory and Warehousing Cycle
•
Capital Acquisition and Prepayments Cycle
•
Cash Management
3.7.4 Case Analysis on Internal Control
3.7.5 Management Letter
3.8 Financial Statement Assertions Audit
3.8.1 Verification of Assets and Liabilities
•
Cash and Bank Balances (including overdrafts)
•
Debtors and Creditors
•
Stocks and Work-in-progress
•
Fixed Assets (Land and Property, Motor Vehicles, Plant and
Equipment) including maintenance and repairs
•
Long term loans
3.8.2 Management Representations
3.9 Audit Report
3.9.1 Types of Audit Opinion
3.9.2 Elements of Unqualified Report
3.9.3 Unqualified and Modified Report
3.10 Introduction to Computer Audit
3.10.1 Effect of Computerization on Audit Process
3.10.2 Internal Control in EDP Environment
3.10.3 Audit Approach to Computer Environment – Use of Computer
Assisted Audit Techniques (CAATs)